UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~December 31, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-35769

NEWS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

46-2950970

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

1211 Avenue of the Americas, New York, New York

10036

(Address of principal executive offices)

(Zip Code)

(212) 416-3400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.01 per share	NWSA	The Nasdaq Global Select Market
Class B Common Stock, par value $0.01 per share	NWS	The Nasdaq Global Select Market
~~Class A Preferred Stock Purchase Rights~~

~~N/AThe Nasdaq Global Select MarketClass B Preferred Stock Purchase RightsN/AThe Nasdaq Global Select Market~~

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~April 30, 2021, 391,181,517~~January 28, 2022, 390,873,619 shares of Class A Common Stock and ~~199,630,240~~198,483,427 shares of Class B Common Stock were outstanding.

Table of Contents

NEWS CORPORATION

FORM 10-Q

TABLE OF CONTENTS


			Page
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Operations for the three and si ~~nine~~x months ended ~~March~~December 31 ~~31, 202~~1 , 2021 and 20 20 2020 (unaudited)			2
Consolidated Statements of Comprehensive Income ~~(Loss)~~for the three and ~~nine~~six months ended ~~March~~December 31 ~~31, 202~~1 , 2021 and 2 02 02020 (unaudited)			3
Consolidated Balance Sheets as of ~~March~~December 31 ~~31, 202~~1, 2021 (unaudited) and June 30, 20 2021 (audited)			4
Consolidated Statements of Cash Flows for the six ~~nine~~months ended ~~March~~December 31 ~~31, 202~~1 , 2021 and 2 ~~020~~2020 (unaudited)			5
Notes to the Unaudited Consolidated Financial Statements			6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2827
Item 3. Quantitative and Qualitative Disclosures About Market Risk			4745
Item 4. Controls and Procedures			4745
Part II. Other Information
Item 1. Legal Proceedings			4846
Item 1A. Risk Factors			4846
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			4847
Item 3. Defaults Upon Senior Securities			4847
Item 4. Mine Safety Disclosures			4847
Item 5. Other Information			4847
Item 6. Exhibits			4948
Signature			5049

Table of Contents

PART I

ITEM 1. FINANCIAL STATEMENTS

NEWS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; millions, except per share amounts)


			For the three months ended March 31,				For the nine months ended March 31,						For the three months ended December 31,				For the six months ended December 31,
		Notes	2021		2020		2021		2020			Notes	2021		2020		2021		2020
Revenues:	Revenues:										Revenues:
Circulation and subscription	Circulation and subscription		$	1,076	$	966	$	3,108	$	2,951	Circulation and subscription		$	1,072	$	1,030	$	2,149	$	2,032
Advertising	Advertising		374		576		1,154		1,861		Advertising		519		448		924		780
Consumer	Consumer		472		396		1,436		1,204		Consumer		594		523		1,118		964
Real estate	Real estate		291		209		807		669		Real estate		352		281		672		516
Other	Other		122		119		361		400		Other		180		132		356		239
Total Revenues	Total Revenues	2	2,335		2,266		6,866		7,085		Total Revenues	2	2,717		2,414		5,219		4,531
Operating expenses	Operating expenses		(1,186)		(1,283)		(3,548)		(3,972)		Operating expenses		(1,279)		(1,198)		(2,523)		(2,362)
Selling, general and administrative	Selling, general and administrative		(851)		(741)		(2,255)		(2,295)		Selling, general and administrative		(852)		(719)		(1,700)		(1,404)
Depreciation and amortization	Depreciation and amortization		(173)		(160)		(504)		(484)		Depreciation and amortization		(168)		(167)		(333)		(331)
Impairment and restructuring charges	Impairment and restructuring charges	4	(30)		(1,125)		(93)		(1,451)		Impairment and restructuring charges	4	(23)		(23)		(45)		(63)
Equity losses of affiliates	Equity losses of affiliates	5	(5)		(7)		(9)		(12)		Equity losses of affiliates	5	(6)		(3)		(6)		(4)
Interest expense, net	Interest expense, net		(12)		(9)		(32)		(13)		Interest expense, net		(21)		(12)		(43)		(20)
Other, net	Other, net	13	61		13		132		19		Other, net	13	(7)		54		130		71
Income (loss) before income tax (expense) benefit			139		(1,046)		557		(1,123)
Income tax (expense) benefit		11	(43)		10		(153)		(21)
Net income (loss)			96		(1,036)		404		(1,144)
Less: Net (income) loss attributable to noncontrolling interests			(17)		306		(60)		272
Net income (loss) attributable to News Corporation stockholders			$	79	$	(730)	$	344	$	(872)

Net income (loss) attributable to News Corporation stockholders per share, basic and diluted		9	$	0.13	$	(1.24)	$	0.58	$	(1.48)
Income before income tax expense											Income before income tax expense		361		346		699		418
Income tax expense											Income tax expense	11	(99)		(85)		(170)		(110)
Net income											Net income		262		261		529		308
Less: Net income attributable to noncontrolling interests											Less: Net income attributable to noncontrolling interests		(27)		(30)		(98)		(43)
Net income attributable to News Corporation stockholders											Net income attributable to News Corporation stockholders		$	235	$	231	$	431	$	265
Net income attributable to News Corporation stockholders per share:											Net income attributable to News Corporation stockholders per share:	9
Basic											Basic		$	0.40	$	0.39	$	0.73	$	0.45
Diluted											Diluted		$	0.40	$	0.39	$	0.72	$	0.45

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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NEWS CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ~~(LOSS)~~

(Unaudited; millions)

For the three months ended
March 31, For the nine months ended
March 31,
2021 2020 2021 2020
Net income (loss) $ 96 $ (1,036) $ 404 $ (1,144)
Other comprehensive income (loss):
Foreign currency translation adjustments 28 (484) 450 (470)
Net change in the fair value of cash flow hedges(a)
0 9 (2) (5)
Benefit plan adjustments, net(b)
1 15 2 13
Other comprehensive income (loss) 29 (460) 450 (462)
Comprehensive income (loss) 125 (1,496) 854 (1,606)
Less: Net (income) loss attributable to noncontrolling interests (17) 306 (60) 272
Less: Other comprehensive (income) loss attributable to noncontrolling interests(c)
(4) 109 (84) 118
Comprehensive income (loss) attributable to News Corporation stockholders $ 104 $ (1,081) $ 710 $ (1,216)


	For the three months ended December 31,				For the six months ended December 31,
	2021		2020		2021		2020
Net income	$	262	$	261	$	529	$	308
Other comprehensive (loss) income:
Foreign currency translation adjustments	(36)		315		(200)		422
Net change in the fair value of cash flow hedges(a)	1		—		2		(2)
Benefit plan adjustments, net(b)	7		(7)		12		1
Other comprehensive (loss) income	(28)		308		(186)		421
Comprehensive income	234		569		343		729
Less: Net income attributable to noncontrolling interests	(27)		(30)		(98)		(43)
Less: Other comprehensive (income) loss attributable to noncontrolling interests(c)	—		(63)		38		(80)
Comprehensive income attributable to News Corporation stockholders	$	207	$	476	$	283	$	606

(a) Net of income tax expense of ~~NaN~~$1 million and $3nil for both the three and six months ended December 31, 2021 and 2020, respectively.

(b) Net of income tax expense (benefit) of $2 million and ($3) million for the three months ended ~~March~~December 31, 2021 and 2020, respectively, and income tax expense of ~~NaN~~$4 million and nil for the ~~nine~~six months ended ~~March 31, 2021 and 2020.~~

~~(b)~~ ~~Net of income tax expense of NaN and $5 million for three months ended March~~December 31, 2021 and 2020, ~~respectively, and income tax expense of NaN and $4 million for the nine months ended March 31, 2021 and 2020,~~ respectively.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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NEWS CORPORATION

CONSOLIDATED BALANCE SHEETS

(Millions, except share and per share amounts)


		Notes	As of March 31, 2021		As of June 30, 2020			Notes	As of December 31, 2021		As of June 30, 2021
			(unaudited)		(audited)				(unaudited)		(audited)
Assets:	Assets:						Assets:
Current assets:	Current assets:						Current assets:
Cash and cash equivalents	Cash and cash equivalents		$	1,974	$	1,517	Cash and cash equivalents		$	2,184	$	2,236
Receivables, net	Receivables, net	13	1,335		1,203		Receivables, net	13	1,665		1,498
Inventory, net	Inventory, net		246		348		Inventory, net		248		253
Other current assets	Other current assets		388		393		Other current assets		502		469
Total current assets	Total current assets		3,943		3,461		Total current assets		4,599		4,456
Non-current assets:	Non-current assets:						Non-current assets:
Investments	Investments	5	391		297		Investments	5	505		351
Property, plant and equipment, net	Property, plant and equipment, net		2,261		2,256		Property, plant and equipment, net		2,134		2,272
Operating lease right-of-use assets	Operating lease right-of-use assets		1,062		1,061		Operating lease right-of-use assets		963		1,035
Intangible assets, net	Intangible assets, net		1,915		1,864		Intangible assets, net		2,082		2,179
Goodwill	Goodwill		4,304		3,951		Goodwill		4,557		4,653
Deferred income tax assets	Deferred income tax assets	11	302		332		Deferred income tax assets	11	295		378
Other non-current assets	Other non-current assets	13	1,219		1,039		Other non-current assets	13	1,385		1,447
Total assets	Total assets		$	15,397	$	14,261	Total assets		$	16,520	$	16,771
Liabilities and Equity:	Liabilities and Equity:						Liabilities and Equity:
Current liabilities:	Current liabilities:						Current liabilities:
Accounts payable	Accounts payable		$	336	$	351	Accounts payable		$	351	$	321
Accrued expenses	Accrued expenses		1,249		1,019		Accrued expenses		1,118		1,339
Deferred revenue	Deferred revenue	2	449		398		Deferred revenue	2	462		473
Current borrowings	Current borrowings	6	212		76		Current borrowings	6	302		28
Other current liabilities	Other current liabilities	13	923		838		Other current liabilities	13	1,000		1,073
Total current liabilities	Total current liabilities		3,169		2,682		Total current liabilities		3,233		3,234
Non-current liabilities:	Non-current liabilities:						Non-current liabilities:
Borrowings	Borrowings	6	1,000		1,183		Borrowings	6	1,968		2,285
Retirement benefit obligations	Retirement benefit obligations		251		277		Retirement benefit obligations		202		211
Deferred income tax liabilities	Deferred income tax liabilities	11	334		258		Deferred income tax liabilities	11	241		260
Operating lease liabilities	Operating lease liabilities		1,146		1,146		Operating lease liabilities		1,035		1,116
Other non-current liabilities	Other non-current liabilities		368		326		Other non-current liabilities		494		519
Commitments and contingencies	Commitments and contingencies	10	0		0		Commitments and contingencies	10	0		0
Class A common stock(a)	Class A common stock(a)		4		4		Class A common stock(a)		4		4
Class B common stock(b)	Class B common stock(b)		2		2		Class B common stock(b)		2		2
Additional paid-in capital	Additional paid-in capital		12,044		12,148		Additional paid-in capital		11,948		12,057
Accumulated deficit	Accumulated deficit		(2,897)		(3,241)		Accumulated deficit		(2,482)		(2,911)
Accumulated other comprehensive loss	Accumulated other comprehensive loss		(965)		(1,331)		Accumulated other comprehensive loss		(1,089)		(941)
Total News Corporation stockholders’ equity	Total News Corporation stockholders’ equity		8,188		7,582		Total News Corporation stockholders’ equity		8,383		8,211
Noncontrolling interests	Noncontrolling interests		941		807		Noncontrolling interests		964		935
Total equity	Total equity	7	9,129		8,389		Total equity	7	9,347		9,146
Total liabilities and equity	Total liabilities and equity		$	15,397	$	14,261	Total liabilities and equity		$	16,520	$	16,771

(a) Class A common stock, $0.01 par value per share (“Class A Common Stock”), 1,500,000,000 shares authorized, ~~391,154,191~~391,879,191 and ~~388,922,752~~391,212,047 shares issued and outstanding, net of 27,368,413 treasury shares at par at ~~March~~December 31, 2021 and June 30, ~~2020,~~2021, respectively.

(b) Class B common stock, $0.01 par value per share (“Class B Common Stock”), 750,000,000 shares authorized, 198,985,085 and 199,630,240 shares issued and outstanding, net of 78,430,424 treasury shares at par at ~~March~~December 31, 2021 and June 30, ~~2020,~~2021, respectively.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Table of Contents

NEWS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; millions)


			For the nine months ended March 31,						For the six months ended December 31,
		Notes	2021		2020			Notes	2021		2020
Operating activities:	Operating activities:						Operating activities:
Net income (loss)			$	404	$	(1,144)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net income							Net income		$	529	$	308
Adjustments to reconcile net income to net cash provided by operating activities:							Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization		504		484		Depreciation and amortization		333		331
Operating lease expense	Operating lease expense		96		128		Operating lease expense		64		64
Equity losses of affiliates	Equity losses of affiliates	5	9		12		Equity losses of affiliates	5	6		4
Cash distributions received from affiliates	Cash distributions received from affiliates		14		7		Cash distributions received from affiliates		7		7
Impairment charges			0		1,398

Other, net	Other, net	13	(132)		(19)		Other, net	13	(130)		(71)
Deferred income taxes and taxes payable	Deferred income taxes and taxes payable	11	33		(67)		Deferred income taxes and taxes payable	11	79		21
Change in operating assets and liabilities, net of acquisitions:	Change in operating assets and liabilities, net of acquisitions:						Change in operating assets and liabilities, net of acquisitions:
Receivables and other assets	Receivables and other assets		(67)		(1,593)		Receivables and other assets		(222)		(172)
Inventories, net	Inventories, net		(21)		(47)		Inventories, net		6		27
Accounts payable and other liabilities	Accounts payable and other liabilities		220		1,303		Accounts payable and other liabilities		(242)		(36)
Net cash provided by operating activities	Net cash provided by operating activities		1,060		462		Net cash provided by operating activities		430		483
Investing activities:	Investing activities:						Investing activities:
Capital expenditures	Capital expenditures		(253)		(335)		Capital expenditures		(208)		(173)
Acquisitions, net of cash acquired	Acquisitions, net of cash acquired		(91)		(2)		Acquisitions, net of cash acquired		(21)		(90)
Investments in equity affiliates and other	Investments in equity affiliates and other		(25)		4		Investments in equity affiliates and other		(46)		(11)

Proceeds from property, plant and equipment and other asset dispositions	Proceeds from property, plant and equipment and other asset dispositions		24		3		Proceeds from property, plant and equipment and other asset dispositions		(2)		3
Other, net	Other, net		(1)		3		Other, net		28		(5)
Net cash used in investing activities	Net cash used in investing activities		(346)		(327)		Net cash used in investing activities		(249)		(276)
Financing activities:	Financing activities:						Financing activities:
Borrowings	Borrowings	6	165		925		Borrowings	6	495		146
Repayment of borrowings	Repayment of borrowings	6	(326)		(1,161)		Repayment of borrowings	6	(500)		(248)
Repurchase of shares							Repurchase of shares	7	(43)		—
Dividends paid	Dividends paid		(104)		(100)		Dividends paid		(86)		(80)
Other, net	Other, net		(64)		(5)		Other, net		(64)		(37)
Net cash used in financing activities	Net cash used in financing activities		(329)		(341)		Net cash used in financing activities		(198)		(219)
Net change in cash and cash equivalents, including cash classified within current assets held for sale			385		(206)
Less: Net change in cash classified within current assets held for sale			0		(10)
Net change in cash and cash equivalents							Net change in cash and cash equivalents		(17)		(12)

Cash and cash equivalents, beginning of period	Cash and cash equivalents, beginning of period		1,517		1,643		Cash and cash equivalents, beginning of period		2,236		1,517
Exchange movement on opening cash balance	Exchange movement on opening cash balance		72		(39)		Exchange movement on opening cash balance		(35)		57
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period		$	1,974	$	1,388	Cash and cash equivalents, end of period		$	2,184	$	1,562

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

News Corporation (together with its subsidiaries, “News Corporation,” “News Corp,” the “Company,” “we” or “us”) is a global diversified media and information services company comprised of businesses across a range of media, including: digital real estate services, subscription video services in Australia, news and information services and book publishing.

During the fourth quarter of fiscal 2020, in connection with the Company's sale of its News America Marketing reporting unit and its annual review of its reportable segments, the Company determined to disaggregate its Dow Jones operating segment as a separate reportable segment in accordance with Accounting Standard Codification (“ASC”) 280, “Segment Reporting.” Previously, the financial information for this operating segment was aggregated with the businesses within the News Media operating segment and, together, formed the News and Information Services reportable segment. Following the sale of its News America Marketing business in the fourth quarter of fiscal 2020 and in conjunction with the Company’s annual budgeting process, the Company determined that aggregation was no longer appropriate as certain of the remaining businesses no longer shared similar economic characteristics. As a result, the Company has revised its historical disclosures for the prior periods to reflect the new Dow Jones and News Media reportable segments.

Basis of Presentation

The accompanying unaudited consolidated financial statements of the Company, which are referred to herein as the “Consolidated Financial Statements,” have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments consisting only of normal recurring adjustments necessary for a fair presentation have been reflected in these Consolidated Financial Statements. Operating results for the interim period presented are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, ~~2021.~~2022. The preparation of the Company’s Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts that are reported in the Consolidated Financial Statements and accompanying disclosures. ~~The business and economic uncertainty resulting from the impacts of the ongoing novel coronavirus (“COVID-19”) pandemic has been considered in making those estimates and assumptions.~~ Actual results could differ from those estimates.

Intercompany transactions and balances have been eliminated. Equity investments in which the Company exercises significant influence but does not exercise control and is not the primary beneficiary are accounted for using the equity method. Investments in which the Company is not able to exercise significant influence over the investee are measured at fair value, if the fair value is readily determinable. If an investment’s fair value is not readily determinable, the Company will measure the investment at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer.

The consolidated statements of operations are referred to herein as the “Statements of Operations.” The consolidated balance sheets are referred to herein as the “Balance Sheets.” The consolidated statements of cash flows are referred to herein as the “Statements of Cash Flows.”

The accompanying Consolidated Financial Statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, ~~2020~~2021 as filed with the Securities and Exchange Commission (the “SEC”) on August ~~11, 2020~~10, 2021 (the ~~“2020~~“2021 Form 10-K”).

Certain reclassifications have been made to the prior period consolidated financial statements to conform to the current year presentation. Specifically, the Company reclassified certain costs at the Other segment that were previously included within Selling, general and administrative to Operating expenses. For the three and nine months ended March 31, 2020, these reclassifications increased Operating expenses by $2 million and $4 million, respectively.

The Company’s fiscal year ends on the Sunday closest to June 30. Fiscal ~~2021~~2022 and fiscal ~~2020~~2021 include 53 and 52 ~~weeks.~~weeks, respectively. All references to the three and ~~nine~~six months ended ~~March~~December 31, 2021 and 2020 relate to the three and ~~nine~~six months ended ~~March 28,~~December 26, 2021 and ~~March 29,~~December 27, 2020, respectively. For convenience purposes, the Company continues to date its Consolidated Financial Statements as of ~~March~~December 31.

~~Table of Contents~~

~~NEWS CORPORATION~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

Recently ~~Issued~~Adopted Accounting Pronouncements

~~Adopted~~

In ~~June 2016,~~December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). The amendments in ASU 2016-13 require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The Company adopted the amendments in ASU 2016-13 on a modified retrospective basis as of July 1, 2020 and the adoption did not have a material effect on the Company's Consolidated Financial Statements. The Company will continue to actively monitor the impact of COVID-19 on expected credit losses.

Allowance for doubtful accounts is calculated by pooling receivables with similar credit risks such as the level of delinquency, types of products or services and geographical locations and reflects the Company’s expected credit losses based on historical experience as well as current and expected economic conditions. ~~Refer to Note 13—Additional Financial Information for further discussion.~~

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 removes, modifies and adds certain disclosure requirements in Topic 820, “Fair Value Measurement.” ASU 2018-13 eliminates certain disclosures related to transfers and the valuation process, modifies disclosures for investments that are valued based on net asset value, clarifies the measurement uncertainty disclosure, and requires additional disclosures for Level 3 fair value measurements. The Company adopted the amendments to disclosure requirements in ASU 2018-13 on a prospective basis as of July 1, 2020. The adoption did not have a material effect on the Company's Consolidated Financial Statements.

In March 2019, the FASB issued ASU 2019-02, “Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20) and Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials (a consensus of the Emerging Issues Task Force)” (“ASU 2019-02”). The amendments in ASU 2019-02 align the impairment model in Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350) with the fair value model in Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20). The Company adopted the amendments in ASU 2019-02 on a prospective basis as of July 1, 2020. The adoption did not have a material effect on the Company's Consolidated Financial Statements. Refer to Note 13—Additional Financial Information for further discussion.

~~Issued~~

~~In December 2019, the FASB issued ASU~~ 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). The amendments in ASU 2019-12 remove certain exceptions to the general principles in Topic 740 and simplify other areas of Topic 740 including the accounting for and recognition of intraperiod tax allocation, deferred tax liabilities for outside basis differences for certain foreign subsidiaries, year-to-date losses in interim periods, deferred tax assets for goodwill in business combinations and franchise taxes in income tax expense. The Company adopted ASU 2019-12 ~~is effective for the Company for annual and interim reporting periods beginning~~on a prospective basis as of July 1, 2021 and the adoption did not have a material effect on the Company’s Consolidated Financial Statements.

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with ~~early adoption permitted.~~Customers” (“ASU 2021-08”). The amendments in ASU 2021-08 require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification 606, “Revenue From Contracts with Customers.” The Company ~~is currently evaluating~~elected to early adopt ASU 2021-08 on a prospective basis during the ~~impact ASU 2019-12 will~~second quarter of fiscal 2022 (which includes retroactive adoptions for any acquisitions in the current fiscal year). The adoption did not have a material effect on ~~its~~the Company’s Consolidated Financial Statements.

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NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. REVENUES

The following tables present the Company’s disaggregated revenues by type and segment for the three and ~~nine~~six months ended ~~March~~December 31, 2021 and 2020:


	For the three months ended December 31, 2021
	Digital Real Estate Services		Subscription Video Services		Dow Jones		Book Publishing		News Media		Other		Total Revenues
	(in millions)
Revenues:
Circulation and subscription	$	3	$	433	$	356	$	—	$	280	$	—	$	1,072
Advertising	33		55		141		—		290		—		519
Consumer	—		—		—		594		—		—		594
Real estate	352		—		—		—		—		—		352
Other	68		10		11		23		68		—		180
Total Revenues	$	456	$	498	$	508	$	617	$	638	$	—	$	2,717

For the three months ended March 31, 2021
Digital Real
Estate
Services Subscription
Video
Services Dow Jones Book
Publishing News Media Other Total
Revenues
(in millions)
Revenues:
Circulation and subscription $ 6 $ 469 $ 329 $ 0 $ 272 $ 0 $ 1,076
Advertising 31 46 85 0 212 0 374
Consumer 0 0 0 472 0 0 472
Real estate 291 0 0 0 0 0 291
Other 23 8 7 18 66 0 122
Total Revenues $ 351 $ 523 $ 421 $ 490 $ 550 $ 0 $ 2,335

For the three months ended March 31, 2020
Digital Real
Estate
Services Subscription
Video
Services Dow Jones Book
Publishing News Media Other Total
Revenues
(in millions)
Revenues:
Circulation and subscription $ 9 $ 414 $ 303 $ 0 $ 240 $ 0 $ 966
Advertising 25 40 84 0 427 0 576
Consumer 0 0 0 396 0 0 396
Real estate 209 0 0 0 0 0 209
Other 18 8 10 16 66 1 119
Total Revenues $ 261 $ 462 $ 397 $ 412 $ 733 $ 1 $ 2,266

For the nine months ended March 31, 2021
Digital Real
Estate
Services Subscription
Video
Services Dow Jones Book
Publishing News Media Other Total
Revenues
(in millions)
Revenues:
Circulation and subscription $ 22 $ 1,352 $ 959 $ 0 $ 775 $ 0 $ 3,108
Advertising 89 151 270 0 644 0 1,154
Consumer 0 0 0 1,436 0 0 1,436
Real estate 807 0 0 0 0 0 807
Other 62 27 24 56 191 1 361
Total Revenues $ 980 $ 1,530 $ 1,253 $ 1,492 $ 1,610 $ 1 $ 6,866


	For the three months ended December 31, 2020
	Digital Real Estate Services		Subscription Video Services		Dow Jones		Book Publishing		News Media		Other		Total Revenues
	(in millions)
Revenues:
Circulation and subscription	$	8	$	446	$	319	$	—	$	257	$	—	$	1,030
Advertising	30		55		115		—		248		—		448
Consumer	—		—		—		523		—		—		523
Real estate	281		—		—		—		—		—		281
Other	20		10		12		21		68		1		132
Total Revenues	$	339	$	511	$	446	$	544	$	573	$	1	$	2,414


	For the six months ended December 31, 2021
	Digital Real Estate Services		Subscription Video Services		Dow Jones		Book Publishing		News Media		Other		Total Revenues
	(in millions)
Revenues:
Circulation and subscription	$	6	$	873	$	705	$	—	$	565	$	—	$	2,149
Advertising	66		114		231		—		513		—		924
Consumer	—		—		—		1,118		—		—		1,118
Real estate	672		—		—		—		—		—		672
Other	138		21		16		45		136		—		356
Total Revenues	$	882	$	1,008	$	952	$	1,163	$	1,214	$	—	$	5,219

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NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


		For the nine months ended March 31, 2020															For the six months ended December 31, 2020
		Digital Real Estate Services		Subscription Video Services		Dow Jones		Book Publishing		News Media		Other		Total Revenues			Digital Real Estate Services		Subscription Video Services		Dow Jones		Book Publishing		News Media		Other		Total Revenues
		(in millions)															(in millions)
Revenues:	Revenues:															Revenues:
Circulation and subscription	Circulation and subscription	$	28	$	1,304	$	888	$	0	$	730	$	1	$	2,951	Circulation and subscription	$	16	$	883	$	630	$	—	$	503	$	—	$	2,032
Advertising	Advertising	77		144		288		0		1,352		0		1,861		Advertising	58		105		185		—		432		—		780
Consumer	Consumer	0		0		0		1,204		0		0		1,204		Consumer	—		—		—		964		—		—		964
Real estate	Real estate	669		0		0		0		0		0		669		Real estate	516		—		—		—		—		—		516
Other	Other	53		29		33		55		229		1		400		Other	39		19		17		38		125		1		239
Total Revenues	Total Revenues	$	827	$	1,477	$	1,209	$	1,259	$	2,311	$	2	$	7,085	Total Revenues	$	629	$	1,007	$	832	$	1,002	$	1,060	$	1	$	4,531

Contract liabilities and assets

The Company’s deferred revenue balance primarily relates to amounts received from customers for subscriptions paid in advance of the services being provided. The following table presents changes in the deferred revenue balance for the three and ~~nine~~six months ended ~~March~~December 31, 2021 and 2020:


		For the three months ended March 31,				For the nine months ended March 31,					For the three months ended December 31,				For the six months ended December 31,
		2021		2020		2021		2020			2021		2020		2021		2020
		(in millions)									(in millions)
Balance, beginning of period	Balance, beginning of period	$	400	$	411	$	398	$	428	Balance, beginning of period	$	467	$	409	$	473	$	398
Deferral of revenue	Deferral of revenue	823		851		2,285		2,426		Deferral of revenue	859		755		1,674		1,462
Recognition of deferred revenue(a)	Recognition of deferred revenue(a)	(780)		(807)		(2,260)		(2,398)		Recognition of deferred revenue(a)	(864)		(779)		(1,678)		(1,480)
Other~~(b)~~	Other~~(b)~~	6		(68)		26		(69)		Other~~(b)~~	—		15		(7)		20
Balance, end of period	Balance, end of period	$	449	$	387	$	449	$	387	Balance, end of period	$	462	$	400	$	462	$	400

(a)For the three and ~~nine~~six months ended ~~March~~December 31, 2021, the Company recognized ~~$224~~$182 million and ~~$359~~$372 million, respectively, of revenue which was included in the opening deferred revenue balance. For the three and ~~nine~~six months ended ~~March~~December 31, 2020, the Company recognized ~~$226~~$237 million and ~~$371~~$331 million, respectively, of revenue which was included in the opening deferred revenue balance.

~~(b)For the three and nine months ended March 31, 2020, the Company reclassified $46 million of deferred revenue to other current liabilities in connection with the sale of News America Marketing.~~

Contract assets were immaterial for disclosure as of ~~March~~December 31, 2021 and 2020.

Other revenue disclosures

The Company typically expenses sales commissions incurred to obtain a customer contract as those amounts are incurred as the amortization period is 12 months or less. These costs are recorded within Selling, general and administrative in the Statements of Operations. The Company also does not capitalize significant financing components when the transfer of the good or service is paid within 12 months or less, or the receipt of consideration is received within 12 months or less of the transfer of the good or service.

For the three and ~~nine~~six months ended ~~March~~December 31, 2021, the Company recognized approximately ~~$116~~$88 million and ~~$296~~$189 million, respectively, in revenues related to performance obligations that were satisfied or partially satisfied in a prior reporting period. The remaining transaction price related to unsatisfied performance obligations as of ~~March~~December 31, 2021 was approximately ~~$417~~$1,005 million, of which approximately ~~$56~~$186 million is expected to be recognized over the remainder of fiscal ~~2021,~~2022, approximately ~~$154~~$308 million is expected to be recognized in fiscal ~~2022~~2023 and approximately ~~$69~~$225 million is expected to be recognized in fiscal ~~2023,~~2024, with the remainder to be recognized thereafter. These amounts do not include (i) contracts with an expected duration of one year or less, (ii) contracts for which variable consideration is determined based on the customer’s subsequent sale or

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~~NEWS CORPORATION~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

usage and (iii) variable consideration allocated to performance obligations accounted for under the series guidance that meets the allocation objective under ~~ASC~~Accounting Standards Codification (“ASC”) 606, “Revenue From Contracts With Customers.”

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NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3. ACQUISITIONS

~~Avail~~Investor’s Business Daily

In ~~December 2020,~~May 2021, the Company acquired ~~Rentalutions, Inc.~~Investor’s Business Daily (“~~Avail”~~IBD”) for ~~initial cash consideration of approximately $36 million, net of $4 million of cash acquired, and up to $8~~$275 million in future cash consideration based upon the achievement of certain performance objectives over the next three years. The Company recorded a $4 million liability related to the contingent consideration, representing the estimated fair value. Included in the initial cash consideration was approximately $6 million that is being held back to satisfy post-closing claims. Availcash. IBD is a ~~platform that improves~~digital-first financial news and research business with unique investing content, analytical products and educational resources, including the ~~renting experience for do-it-yourself landlords and tenants with online tools, educational content and world-class support.~~Investors.com website. The acquisition ~~helps realtor.com~~® ~~further expand into~~expands Dow Jones’s offerings with the ~~rental space, extend its support for landlords, augment current rental listing content, grow its audience~~addition of proprietary data and ~~build brand affinity~~tools to help professional and ~~long-term relationships with renters. Avail~~retail investors identify top-performing stocks. IBD is ~~a subsidiary of Move,~~operated by Dow Jones, and its results are included within the ~~Digital Real Estate Services segment.~~

The purchase price allocation has been prepared on a preliminary basis and changes to the preliminary purchase price allocations may occur as additional information concerning asset and liability valuations is finalized. Under the acquisition method of accounting, the total consideration was first allocated to net tangible assets and identifiable intangible assets based upon their fair values as of the date of completion of the acquisition. As a result of the acquisition, the Company recorded approximately $7 million related to the technology platform with a weighted average useful life of five years. In accordance with ASC 350, “Intangibles – Goodwill and Other” (“ASC 350”), the excess of the total consideration over the fair values of the net tangible and intangible assets of approximately $32 million was recorded as goodwill on the transaction.

~~Elara~~

In December 2020, the Company acquired a controlling interest in Elara Technologies Pte. Ltd. (“Elara”) through a subscription for newly-issued preference shares and the buyout of certain minority shareholders. The total aggregate purchase price associated with the acquisition at the completion date is $138 million which primarily consists of $69 million of cash, the fair value of noncontrolling interests of $37 million and the fair value of the Company’s previously held equity interest in Elara of $22 million.The acquisition of Elara was accounted for in accordance with ASC 805 “Business Combinations”, which requires the Company to re-measure its previously held equity interest in Elara at its acquisition date fair value. The carrying amount of the Company’s previously held equity interest in Elara was $15 million and, accordingly, the Company recognized a gain on remeasurement of $7 million which was recorded in Other, net in the Statement of Operations.

As a result of the transactions, REA Group’s shareholding in Elara increased from 13.5% to 59.7%, while News Corporation’s shareholding increased from 22.1% to 39.0%. During the three months ended March 31, 2021, REA Group acquired an additional 0.8% interest in Elara. REA Group and News Corporation now hold a combined 8 of 9 Elara board seats, and the Company began consolidating Elara in December 2020. The Company’s ownership in REA Group was diluted by 0.2% to 61.4% as a result of the transactions. The acquisition of Elara allows REA Group to be at the forefront of long-term growth opportunities within India and the digitization of the real estate sector. Elara is a subsidiary of REA Group, and its results are reported within the Digital Real Estate ServicesDow Jones segment.

The purchase price allocation has been prepared on a preliminary basis and changes to the preliminary purchase price allocations may occur as additional information concerning asset and liability valuations is finalized. Under the acquisition method of accounting, the total consideration was first allocated to net tangible assets and identifiable intangible assets based upon their fair values as of the date of completion of the acquisition. As a result of the acquisition, the Company recorded net tangible liabilities of $5approximately $16 million primarily related to deferred revenue and approximately ~~$31~~$123 million of identifiable intangible assets, consisting primarily of ~~which $19~~approximately $51 million related to the IBD tradename with an indefinite life, approximately $43 million of subscriber relationships with a useful life of seven years and approximately $20 million related to technology with a useful life of seven years. In accordance with ASC 350, “Intangibles—Goodwill and Other” (“ASC 350”), the excess of the total consideration over the fair values of the net tangible and intangible assets of approximately $166 million was recorded as goodwill on the transaction.

HMH Books & Media

In May 2021, the Company acquired the Books & Media segment of Houghton Mifflin Harcourt (“HMH Books & Media”) for $349 million in cash. HMH Books & Media publishes renowned and awarded children’s, young adult, fiction, non-fiction, culinary and reference titles. The acquisition adds an extensive and successful backlist, a strong frontlist in the lifestyle and children’s segments and a productions business that provides opportunities to expand HarperCollins’s intellectual property across different formats. HMH Books & Media is a subsidiary of HarperCollins and its results are included in the Book Publishing segment.

The purchase price allocation has been prepared on a preliminary basis and changes to the preliminary purchase price allocations may occur as additional information concerning asset and liability valuations is finalized. As a result of the acquisition, the Company recorded net tangible assets of approximately $82 million, primarily consisting of accounts receivable, accounts payable, author advances and royalty payables and inventory. In addition, the Company recorded approximately $141 million of intangible assets, consisting primarily of $104 million of publishing rights for backlist titles with a useful life of nine years and $32 million of publishing licenses with a useful life of nine years. In accordance with ASC 350, the excess of the total consideration over the fair values of the net tangible and intangible assets of approximately $126 million was recorded as goodwill on the transaction.

Mortgage Choice

In June 2021, REA Group acquired Mortgage Choice Limited (“Mortgage Choice”) for approximately A$244 million in cash (approximately $183 million based on exchange rates as of the closing date), funded by an increase in REA Group’s debt facilities. Control was transferred and the acquisition became effective and binding on Mortgage Choice shareholders on June 18, 2021 upon court approval. Mortgage Choice is a leading Australian mortgage broking business, and the acquisition complements REA Group’s existing Smartline broker footprint and accelerates REA Group’s financial services strategy to establish a leading mortgage broking business with national scale. Mortgage Choice is a subsidiary of REA Group and its results are included in the Digital Real Estate Services segment.

The purchase price allocation has been prepared on a preliminary basis and changes to the preliminary purchase price allocations may occur as additional information concerning asset and liability valuations is finalized. As a result of the acquisition, the Company recorded net tangible assets of A$75 million (US$57 million) consisting primarily of commission contract receivables and payables and approximately A$74 million (US$56 million) of identifiable intangible assets, consisting of A$46 million (US$35 million) related to franchisee relationships with a useful life of 17 years, A$17 million (US$13 million) of software with useful lives ranging from one to five years and A$11 million (US$8 million) primarily related to ~~Elara technology platforms with a weighted average useful life of five years and $12 million related to trade names~~the Mortgage Choice tradenames with indefinite lives. In accordance with ASC 350, the excess of the total consideration over the fair values of the net tangible and intangible assets of approximately ~~$113~~A$95 million (US$72 million) was recorded as goodwill on the transaction.

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NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Agreement to acquire OPIS

In July 2021, the Company entered into an agreement to acquire the Oil Price Information Service business and related assets (“OPIS”) from S&P Global Inc. (“S&P”) and IHS Markit Ltd. (“IHS”) for $1.15 billion in cash, subject to customary purchase price adjustments. OPIS is a global industry standard for benchmark and reference pricing and news and analytics for the oil, natural gas liquids and biofuels industries. The business also provides pricing and news and analytics for the coal, mining and metals end markets and insights and analytics in renewables and carbon pricing. OPIS will be a subsidiary of Dow Jones, and its results will be included in the Dow Jones segment. The acquisition is subject to customary closing conditions, including regulatory approvals and the consummation of the S&P and IHS merger. Closing is expected in the second half of fiscal 2022.

Agreement to acquire Base Chemicals

In December 2021, the Company entered into an agreement to acquire the Base Chemicals business (“Base Chemicals”) from S&P and IHS for $295 million in cash, subject to customary purchase price adjustments. Base Chemicals provides pricing data, insights, analysis and forecasting for key base chemicals through its leading Market Advisory and World Analysis services. Base Chemicals will be a subsidiary of Dow Jones, and its results will be included in the Dow Jones segment. The acquisition is subject to customary closing conditions, including regulatory approvals and the consummation of the S&P and IHS merger. Closing is expected in the second half of fiscal 2022.

NOTE ~~4 .~~4. RESTRUCTURING PROGRAMS

Fiscal ~~2021~~2022

During the three and ~~nine~~six months ended ~~March~~December 31, 2021, the Company recorded restructuring charges of ~~$30~~$23 million and ~~$93~~$45 million, respectively, of which ~~$18~~$12 million and ~~$61~~$24 million, respectively, ~~are~~ related to the News Media segment. The restructuring charges recorded in fiscal 2022 primarily related to employee termination benefits.

Fiscal 2021

During the three and six months ended December 31, 2020, the Company recorded restructuring charges of $23 million and $63 million, respectively, of which $12 million and $43 million, respectively, related to the News Media segment. The restructuring charges recorded in fiscal 2021 primarily related to employee termination benefits and exit costs associated with the closure of the Company’s Bronx print plant.

Changes in restructuring program liabilities were as follows:


	For the three months ended December 31,
	2021				2020
	One time employee termination benefits		Other costs		Total		One time employee termination benefits		Other costs		Total
	(in millions)
Balance, beginning of period	$	28	$	37	$	65	$	34	$	30	$	64
Additions	19		4		23		16		7		23
Payments	(24)		(5)		(29)		(21)		(3)		(24)
Other	—		—		—		3		—		3
Balance, end of period	$	23	$	36	$	59	$	32	$	34	$	66

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NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

restructuring charges recorded in fiscal 2021 primarily relate to employee termination benefits and exit costs associated with the anticipated closure of the Company’s Bronx print plant. In September 2020, the Company announced that it plans to close the plant and shift the printing of those publications in New York to a third party facility during fiscal 2021.

~~Fiscal 2020~~

During the three and nine months ended March 31, 2020, the Company recorded restructuring charges of $19 million and $53 million, respectively, of which $13 million and $37 million, respectively, related to the News Media segment. The restructuring charges recorded in fiscal 2020 were for employee termination benefits.

~~Changes in restructuring program liabilities were as follows:~~

For the three months ended March 31,
2021 2020
One time
employee
termination
benefits Other costs Total One time
employee
termination
benefits Facility
related
costs Other costs Total
(in millions)
Balance, beginning of period $ 32 $ 34 $ 66 $ 16 $ 0 $ 9 $ 25
Additions 20 10 30 19 0 0 19
Payments (12) (8) (20) (17) 0 0 (17)
Other (2) 0 (2) 0 0 0 0
Balance, end of period $ 38 $ 36 $ 74 $ 18 $ 0 $ 9 $ 27


		For the nine months ended March 31,												For the six months ended December 31,
		2021				2020								2021						2020
		One time employee termination benefits		Other costs		Total		One time employee termination benefits		Facility related costs		Other costs			Total			One time employee termination benefits		Other costs		Total		One time employee termination benefits		Other costs		Total
		(in millions)												(in millions)
Balance, beginning of period	Balance, beginning of period	$	64	$	9	$	73	$	28	$	2	$	10		$	40	Balance, beginning of period	$	51	$	35	$	86	$	64	$	9	$	73
Additions	Additions	55		38		93		53		0		0			53		Additions	37		8		45		35		28		63
Payments	Payments	(81)		(11)		(92)		(63)		0		(1)			(64)		Payments	(65)		(7)		(72)		(69)		(3)		(72)
Other	Other	0		0		0		0		(2)		0			(2)		Other	—		—		—		2		—		2
Balance, end of period	Balance, end of period	$	38	$	36	$	74	$	18	$	0	$	9		$	27	Balance, end of period	$	23	$	36	$	59	$	32	$	34	$	66

As of ~~March~~December 31, 2021, restructuring liabilities of approximately ~~$46~~$31 million were included in the Balance Sheet in Other current liabilities and $28 million were included in Other non-current liabilities.

NOTE 5. INVESTMENTS

The Company’s investments were comprised of the following:


		Ownership Percentage as of March 31, 2021	As of March 31, 2021		As of June 30, 2020			Ownership Percentage as of December 31, 2021	As of December 31, 2021		As of June 30, 2021
			(in millions)						(in millions)
Equity method investments(a)	Equity method investments(a)	various	$	123	$	120	Equity method investments(a)	various	$	215	$	71
Equity securities(b)	Equity securities(b)	various	268		177		Equity securities(b)	various	290		280
Total Investments	Total Investments		$	391	$	297	Total Investments		$	505	$	351

(a)~~Equity method investments are primarily comprised~~During the six months ended December 31, 2021, REA Group acquired an 18% interest (16.6% on a diluted basis) in PropertyGuru Pte. Ltd. (“PropertyGuru”), a leading digital property technology company operating marketplaces in Southeast Asia, in exchange for all shares of ~~Foxtel’s investment~~REA Group’s entities in ~~Nickelodeon Australia Joint Venture~~Malaysia and until December 2020, Elara, which operates PropTiger.com and Housing.com. In December 2020, the Company acquired a controlling interest in Elara and began consolidating its results. Refer to Note 3—Acquisitions for further discussion.Thailand.

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~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

(b)Equity securities are primarily comprised of Tremor, certain investments in China and the Company’s ~~investments~~investment in HT&E Limited, which operates a portfolio of Australian radio and outdoor media ~~assets, and Tremor International Ltd (“Tremor”).~~assets.

The Company has equity securities with quoted prices in active markets as well as equity securities without readily determinable fair market values. Equity securities without readily determinable fair market values are valued at cost, less any impairment, plus or minus changes in fair value resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. The components comprising total gains and losses on equity securities are set forth below:

For the three months ended
March 31, For the nine months ended
March 31,
2021 2020 2021 2020
(in millions) (in millions)
Total gains (losses) recognized on equity securities $ 31 $ (17) $ 73 $ (22)
Less: Net gains recognized on equity securities sold 0 0 0 0
Unrealized gains (losses) recognized on equity securities held at end of period $ 31 $ (17) $ 73 $ (22)


	For the three months ended December 31,				For the six months ended December 31,
	2021		2020		2021		2020
	(in millions)				(in millions)
Total (losses) gains recognized on equity securities	$	(9)	$	33	$	19	$	42
Less: Net gains recognized on equity securities sold	—		—		—		—
Unrealized (losses) gains recognized on equity securities held at end of period	$	(9)	$	33	$	19	$	42

Equity Losses of Affiliates

The Company’s share of the losses of its equity affiliates was $5$6 million and $9$6 million for the three and ~~nine~~six months ended ~~March~~December 31, 2021, respectively, and $7$3 million and ~~$12~~$4 million, respectively, for the corresponding periods of fiscal ~~2020.~~

~~NOTE 6. BORROWINGS~~

~~The Company’s total borrowings consist of the following:~~

Interest rate at March 31, 2021 Maturity at March 31, 2021 As of
March 31, 2021 As of
June 30, 2020
(in millions)
Foxtel Group
Credit facility 2019(a) (c)
2.83 % Nov 22, 2022 $ 248 $ 371
Term loan facility 2019(b)
6.25 % Nov 22, 2024 191 171
Working capital facility 2017(a) (c)
2.83 % Nov 22, 2022 0 0
Telstra Facility(d)
7.81 % Dec 22, 2027 50 11
US private placement 2012 — USD portion — tranche 2(e)
4.27 % Jul 25, 2022 201 200
US private placement 2012 — USD portion — tranche 3(e)
4.42 % Jul 25, 2024 151 150
US private placement 2012 — AUD portion 7.04 % Jul 25, 2022 80 73
REA Group
Credit facility 2018(f)
0.91 % Apr 27, 2021 53 48
Credit facility 2019(g)
0.91 % Dec 2, 2021 130 117
Credit facility 2020(h)
2.06 % Dec 2, 2021 0 0
Finance lease and other liabilities 108 118
Total borrowings(i)
1,212 1,259
Less: current portion(j)
(212) (76)
Long-term borrowings $ 1,000 $ 1,183

~~(a)~~Borrowings under these facilities bear interest at a floating rate of the Australian BBSY plus an applicable margin of between 2.00% and 3.75% per annum depending on the Foxtel Debt Group’s (defined below) net leverage ratio.

~~(b)Borrowings under this facility bear interest at a fixed rate of 6.25% per annum.~~

~~(c)As of March 31, 2021, the Foxtel Debt Group had undrawn commitments of A$313 million under these facilities for which it pays a commitment fee of 45% of the applicable margin.~~2021.

1211

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6. BORROWINGS

The Company’s total borrowings consist of the following:


	Interest rate at December 31, 2021		Maturity at December 31, 2021	As of December 31, 2021		As of June 30, 2021
				(in millions)
News Corporation
2021 Senior notes	3.875	%	May 15, 2029	$	986	$	985
Foxtel Group(a)
2019 Credit facility(b)	2.36	%	May 31, 2024	217		232
2019 Term loan facility	6.25	%	Nov 22, 2024	181		190
2017 Working capital facility(b)	2.36	%	May 31, 2024	—		—
Telstra Facility	7.83	%	Dec 22, 2027	79		60
2012 US private placement — USD portion — tranche 2(c)	4.27	%	Jul 25, 2022	203		202
2012 US private placement — USD portion — tranche 3(c)	4.42	%	Jul 25, 2024	152		152
2012 US private placement — AUD portion	7.04	%	Jul 25, 2022	73		78
REA Group(a)
2021 Bridge facility	—	%	Jul 31, 2022	—		314
2022 Credit facility — tranche 1(d)	1.12	%	Sep 16, 2024	289		—
2022 Credit facility — tranche 2(d)	1.27	%	Sep 16, 2025	8		—
Finance lease and other liabilities				82		100
Total borrowings				2,270		2,313
Less: current portion(e)				(302)		(28)
Long-term borrowings				$	1,968	$	2,285

~~(d)~~(a)~~Borrowings under this facility bear interest at a variable rate~~These borrowings were incurred by certain subsidiaries of ~~Australian BBSY plus a margin~~NXE Australia Pty Limited (the “Foxtel Group” and together with such subsidiaries, the “Foxtel Debt Group”) and REA Group and certain of ~~7.75%. The Company excludes borrowings under this facility from~~its subsidiaries (REA Group and certain of its subsidiaries, the ~~Statements~~“REA Debt Group”), consolidated but non wholly-owned subsidiaries of ~~Cash Flows~~News Corp, and are only guaranteed by the Foxtel Group and REA Group and their respective subsidiaries, as ~~they~~applicable, and are ~~non-cash.~~non-recourse to News Corp.

~~(e)~~(b)As of December 31, 2021, the Foxtel Debt Group had undrawn commitments of A$340 million available under these facilities.

(c)The carrying values of the borrowings include any fair value adjustments related to the Company’s fair value hedges. See Note 8—Financial Instruments and Fair Value Measurements.

~~(f)~~(d)~~Borrowings~~As of December 31, 2021, REA Group had total undrawn commitments of A$187 million available under ~~this facility bear interest at a floating rate of~~ the ~~Australian BBSY plus a margin of between 0.85% and 2.75% depending on REA Group’s net leverage ratio.~~2022 Credit Facility (as defined below).

~~(g)Borrowings under this facility bear interest at a floating rate of the Australian BBSY plus a margin of between 0.85% and 2.00% depending on REA Group’s net leverage ratio.~~

~~(h)Borrowings under this facility bear interest at a floating rate of the Australian BBSY plus a margin of 2.00% or 2.75% depending on REA Group’s net leverage ratio.~~

~~(i)~~The Company’s outstanding borrowings as of March 31, 2021 were incurred by certain subsidiaries of NXE Australia Pty Limited (“Foxtel” and, together with such subsidiaries, the “Foxtel Debt Group”) and by REA Group and certain of its subsidiaries. Foxtel and REA Group are consolidated but non wholly-owned subsidiaries of News Corp. These borrowings are only guaranteed by Foxtel and REA Group and certain of their respective subsidiaries, as applicable, and are non-recourse to News Corp.

~~(j)~~(e)The Company classifies the current portion of long term debt as non-current liabilities on the Balance Sheets when it has the intent and ability to refinance the obligation on a long-term basis, in accordance with ASC 470-50 “Debt.” ~~$29~~$26 million and $28 million relates to the current portion of finance lease ~~liabilities.~~liabilities as of December 31, 2021 and June 30, 2021, respectively.

Revolving Credit Facility Amendment

Due to the discontinuation of London interbank offered rates (“LIBOR”) for Euro and British pound sterling (“GBP”)-denominated borrowings and for certain Eurodollar Rate borrowings with a two or 12-month tenor, the Company amended its undrawn $750 million unsecured revolving credit facility in November 2021 to (i) replace the benchmark rates for borrowings in Euro and GBP with designated benchmark rates based on the Euro Interbank Offer Rate and the Sterling Overnight Index

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NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Average, respectively, and (ii) remove the two and 12-month interest period options for the relevant Eurodollar Rate borrowings.

REA Group ~~has access to an~~Refinancing

During the six months ended December 31, 2021, REA Group completed a debt refinancing in which it repaid all amounts outstanding under its 2021 Bridge facility with the proceeds from a new A$20600 million ~~overdraft~~unsecured syndicated credit facility (the ~~“2020 Overdraft~~“2022 Credit Facility”) consisting of 2 sub-facilities: (i) a three year, A$400 million revolving loan facility (the “2022 Credit facility — tranche 1”) and (ii) a four year, A$200 million revolving loan facility (the “2022 Credit facility — tranche 2”). ~~The 2020 Overdraft~~REA Group may request increases in the amount of the 2022 Credit Facility ~~is an uncommitted~~up to a maximum amount of A$500 million, subject to the terms and limitations set forth in the syndicated facility ~~that will be reviewed annually by~~agreement.

Borrowings under the ~~lender and bears~~2022 Credit facility — tranche 1 accrue interest at a rate ~~based~~of the Australian BBSY plus a margin of between 1.00% and 2.10%, depending on REA Group’s net leverage ratio. Borrowings under the ~~lender’s benchmark borrowing~~2022 Credit facility — tranche 2 accrue interest at a rate ~~less~~of the Australian BBSY plus a ~~discount~~margin of ~~4.22%. The 2020 Overdraft Facility carries an annual facility~~between 1.15% and 2.25%, depending on REA Group’s net leverage ratio. Both tranches carry a commitment fee of ~~0.15%~~40% of the ~~A$20 million overdraft limit. As of March 31, 2021, REA Group had 0t borrowed~~applicable margin on any ~~funds under the 2020 Overdraft Facility. In October 2020, REA Group amended certain terms of its credit facilities to, among other things, require~~undrawn balance.

The 2022 Credit Facility requires REA Group to maintain (i) a net leverage ratio of not more than 3.5 to 1.0 asand (ii) an interest coverage ratio of not less than 3.0 to 1.0. The syndicated facility agreement also contains certain other customary affirmative and ~~subsequent~~negative covenants. Subject to ~~December 31, 2020.~~

The Company has access to an unsecured $750 million revolving credit facility (the “2019 News Corp Credit Facility”) under the Company’s 2019 Credit Agreement (the “2019 Credit Agreement”) that can be used for general corporate purposes. The 2019 News Corp Credit Facility has a sub-limitcertain exceptions, these covenants restrict or prohibit REA Group and its subsidiaries from, among other things, incurring or guaranteeing debt, disposing of ~~$100 million~~certain properties or assets, merging or consolidating with any other person, making financial accommodation available, ~~for issuances of letters of credit. The Company may request increases~~entering into certain other financing arrangements, creating or permitting certain liens, engaging in ~~the amount of the facility up to a maximum amount of $1 billion. The lenders’ commitments to make the 2019 News Corp Credit Facility available terminate on December 12, 2024,~~non arms’ length transactions with affiliates, undergoing fundamental business changes and ~~the Company may request that the commitments be extended under certain circumstances for up to 2 additional one-year periods.~~

Interest on borrowings under the 2019 News Corp Credit Facility is based on either (a) a Eurodollar Rate formula or (b) the Base Rate formula, each as set forth in the 2019 Credit Agreement. The applicable margin and the commitment fee are based on the pricing grid in the 2019 Credit Agreement, which varies based on the Company’s adjusted operating income net leverage ratio. As of March 31, 2021, the Company was paying a commitment fee of 0.20% on any undrawn balance and an applicable margin of 0.375% for a Base Rate borrowing and 1.375% for a Eurodollar Rate borrowing. As of March 31, 2021, the Company had 0t borrowed any funds under the 2019 News Corp Credit Facility.making restricted payments.

Covenants

The Company’s borrowings and those of its consolidated subsidiaries contain customary representations, covenants and events of default, including those discussed above and in the Company’s ~~2020~~2021 Form 10-K. If any of the events of default occur and are not cured within applicable grace periods or waived, any unpaid amounts under the ~~Company’s~~applicable debt agreements may be declared immediately due and payable. The Company was in compliance with all such covenants at ~~March~~December 31, 2021.

~~Foxtel Debt Amendment~~

~~On April 9,~~NOTE 7. EQUITY

The following tables summarize changes in equity for the three and six months ended December 31, 2021 ~~the Foxtel Debt Group amended its 2019 Credit Facility~~ and 2017 Working Capital Facility to, among other things, extend the debt maturity from November 2022 to May 2024 and reduce the applicable margin to between 2.00% to 3.25%, depending on the Foxtel Debt Group’s net leverage ratio.2020:


	For the three months ended December 31, 2021
	Class A Common Stock			Class B Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total News Corp Equity		Non-controlling Interests		Total Equity
	Shares	Amount		Shares	Amount
	(in millions)
Balance, September 30, 2021	393	$	4	200	$	2	$	11,980	$	(2,715)	$	(1,061)	$	8,210	$	938	$	9,148

Net income	—	—		—	—		—		235		—		235		27		262
Other comprehensive loss	—	—		—	—		—		—		(28)		(28)		—		(28)
Dividends	—	—		—	—		—		—		—		—		—		—
Share repurchases	(1)	—		(1)	—		(44)		(2)		—		(46)		—		(46)
Other	—	—		—	—		12		—		—		12		(1)		11
Balance, December 31, 2021	392	$	4	199	$	2	$	11,948	$	(2,482)	$	(1,089)	$	8,383	$	964	$	9,347

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NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~NOTE 7 . EQUITY~~

~~The following tables summarize changes in equity for the three and nine months ended March 31, 2021 and 2020:~~


		For the three months ended March 31, 2021																											For the three months ended December 31, 2020
		Class A Common Stock			Class B Common Stock			Additional Paid-in Capital				Accumulated Deficit		Accumulated Other Comprehensive Loss					Total News Corp Equity			Non-controlling Interests				Total Equity			Class A Common Stock				Class B Common Stock			Additional Paid-in Capital				Accumulated Deficit				Accumulated Other Comprehensive Loss				Total News Corp Equity				Non-controlling Interests				Total Equity
		Shares	Amount		Shares	Amount												Shares						Amount						Shares		Amount
		(in millions)																											(in millions)
Balance, December 31, 2020		391	$	4	200	$	2			$	12,091					$	(2,976)				$	(990)			$	8,131			$	943	$	9,074
Balance, September 30, 2020																												Balance, September 30, 2020	391		$	4	200	$	2			$	12,075			$	(3,207)			$	(1,235)			$	7,639			$	815			$	8,454

Net income	Net income	—	—		—	—		—				79		—					79			17				96		Net income	—		—		—	—		—				231				—				231				30				261
Other comprehensive income	Other comprehensive income	—	—		—	—		—				—		25					25			4				29		Other comprehensive income	—		—		—	—		—				—				245				245				63				308
Dividends	Dividends	—	—		—	—		(59)				—		—					(59)			(24)				(83)		Dividends	—		—		—	—		—				—				—				—				(1)				(1)
Other	Other	0	—		—	—		12				—		—					12			1				13		Other	—		—		—	—		16				—				—				16				36				52
Balance, March 31, 2021		391	$	4	200	$	2	$	12,044			$	(2,897)	$	(965)				$	8,188		$	941			$	9,129
Balance, December 31, 2020																												Balance, December 31, 2020	391		$	4	200	$	2	$	12,091			$	(2,976)			$	(990)			$	8,131			$	943			$	9,074


		For the three months ended March 31, 2020																											For the six months ended December 31, 2021
		Class A Common Stock			Class B Common Stock			Additional Paid-in Capital				Accumulated Deficit		Accumulated Other Comprehensive Loss					Total News Corp Equity			Non-controlling Interests				Total Equity			Class A Common Stock				Class B Common Stock			Additional Paid-in Capital				Accumulated Deficit				Accumulated Other Comprehensive Loss				Total News Corp Equity				Non-controlling Interests				Total Equity
		Shares	Amount		Shares	Amount												Shares						Amount						Shares		Amount
		(in millions)																											(in millions)
Balance, December 31, 2019		389	$	4	200	$	2			$	12,183					$	(2,114)				$	(1,117)			$	8,958			$	1,169	$	10,127
Balance, June 30, 2021																												Balance, June 30, 2021	391		$	4	200	$	2			$	12,057			$	(2,911)			$	(941)			$	8,211			$	935			$	9,146

Net loss		—	—		—	—		—				(730)		—					(730)			(306)				(1,036)
Net income																												Net income	—		—		—	—		—				431				—				431				98				529
Other comprehensive loss	Other comprehensive loss	—	—		—	—		—				—		(351)					(351)			(109)				(460)		Other comprehensive loss	—		—		—	—		—				—				(148)				(148)				(38)				(186)
Dividends	Dividends	—	—		—	—		(59)				—		—					(59)			(19)				(78)		Dividends	—		—		—	—		(59)				—				—				(59)				(27)				(86)
Share repurchases																												Share repurchases	(1)		—		(1)	—		(44)				(2)				—				(46)				—				(46)
Other	Other	0	—		—	—		13				(1)		2					14			1				15		Other	2		—		—	—		(6)				—				—				(6)				(4)				(10)
Balance, March 31, 2020		389	$	4	200	$	2	$	12,137			$	(2,845)	$	(1,466)				$	7,832		$	736			$	8,568
Balance, December 31, 2021																												Balance, December 31, 2021	392		$	4	199	$	2	$	11,948			$	(2,482)			$	(1,089)			$	8,383			$	964			$	9,347


	For the six months ended December 31, 2020
	Class A Common Stock			Class B Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total News Corp Equity		Non-controlling Interests		Total Equity
	Shares	Amount		Shares	Amount
	(in millions)
Balance, June 30, 2020	389	$	4	200	$	2	$	12,148	$	(3,241)	$	(1,331)	$	7,582	$	807	$	8,389

Net income	—	—		—	—		—		265		—		265		43		308
Other comprehensive income	—	—		—	—		—		—		341		341		80		421
Dividends	—	—		—	—		(59)		—		—		(59)		(21)		(80)
Other	2	—		—	—		2		—		—		2		34		36
Balance, December 31, 2020	391	$	4	200	$	2	$	12,091	$	(2,976)	$	(990)	$	8,131	$	943	$	9,074

For the nine months ended March 31, 2021
Class A Common
Stock Class B Common
Stock Additional
Paid-in
Capital Accumulated
Deficit Accumulated
Other
Comprehensive
Loss Total
News
Corp
Equity Non-controlling
Interests Total
Equity
Shares Amount Shares Amount
(in millions)
Balance, June 30, 2020 389 $ 4 200 $ 2 $ 12,148 $ (3,241) $ (1,331) $ 7,582 $ 807 $ 8,389
Net income — — — — — 344 — 344 60 404
Other comprehensive income — — — — — — 366 366 84 450
Dividends — — — — (118) — — (118) (45) (163)
Other 2 — — — 14 — — 14 35 49
Balance, March 31, 2021 391 $ 4 200 $ 2 $ 12,044 $ (2,897) $ (965) $ 8,188 $ 941 $ 9,129
Stock Repurchases

On September 22, 2021, the Company announced a new stock repurchase program authorizing the Company to purchase up to $1 billion in the aggregate of its outstanding Class A Common Stock and Class B Common Stock (the “Repurchase Program”). The Repurchase Program replaces the Company’s $500 million Class A Common Stock repurchase program approved by the Company’s Board of Directors (the “Board of Directors”) in May 2013. The manner, timing, number and share price of any repurchases will be determined by the Company at its discretion and will depend upon such factors as the market price of the stock, general market conditions, applicable securities laws, alternative investment opportunities and other factors. The Repurchase Program has no time limit and may be modified, suspended or discontinued at any time. As of December 31, 2021, the remaining authorized amount under the Repurchase Program was approximately $954 million.

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NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

For the nine months ended March 31, 2020
Class A
Common Stock Class B
Common Stock Additional
Paid-in
Capital Accumulated
Deficit Accumulated
Other
Comprehensive
Loss Total
News
Corp
Equity Non-controlling
Interests Total
Equity
Shares Amount Shares Amount
(in millions)
Balance, June 30, 2019 386 $ 4 200 $ 2 $ 12,243 $ (1,979) $ (1,126) $ 9,144 $ 1,167 $ 10,311
Cumulative impact from adoption of new standards — — — — — 6 3 9 — 9
Net loss — — — — — (872) — (872) (272) (1,144)
Other comprehensive loss — — — — — — (344) (344) (118) (462)
Dividends — — — — (118) — — (118) (41) (159)
Other 3 — — — 12 0 1 13 0 13
Balance, March 31, 2020 389 $ 4 200 $ 2 $ 12,137 $ (2,845) $ (1,466) $ 7,832 $ 736 $ 8,568

Stock ~~Repurchases~~

repurchases commenced on November 9, 2021, and during the three and six months ended December 31, 2021, the Company repurchased and subsequently retired 1.4 million shares of Class A Common Stock for approximately $31 million and 0.7 million shares of Class B Common Stock for approximately $15 million. The Company did 0tnot purchase any of its Class A Common Stock or Class B Common Stock during the ~~nine~~six months ended ~~March~~December 31, 2020.

Stockholder Rights Agreement

On September 21, 2021, the Company amended the Fourth Amended and ~~2020.~~Restated Rights Agreement (as discussed in the Notes to the Consolidated Financial Statements included in the 2021 Form 10-K) (the “Rights Agreement”) to accelerate the expiration of the rights under the Rights Agreement to 11:59 P.M. (New York City time) on September 21, 2021, thereby terminating the Rights Agreement at such time. On the same date, the Company also entered into a stockholders agreement (the “Stockholders Agreement”) by and between the Company and the Murdoch Family Trust (the “MFT”). Pursuant to the Stockholders Agreement, the MFT and the Company have agreed not to take actions that would result in the MFT and Murdoch family members, including K. Rupert Murdoch, the Company’s Executive Chairman, and Lachlan K. Murdoch, the Company’s Co-Chairman, together owning more than 44% of the outstanding voting power of the shares of the Company’s Class B Common Stock (“Class B Shares”), or would increase the MFT’s voting power by more than 1.75% in any rolling twelve-month period. The MFT would forfeit votes in connection with an annual or special Company stockholders meeting to the extent necessary to ensure that the MFT and the Murdoch family collectively do not exceed 44% of the outstanding voting power of the Class B Shares at such meeting, except where a Murdoch family member votes their own shares differently from the MFT on any matter. The Stockholders Agreement will terminate upon the MFT’s distribution of all or substantially all of its Class B Shares.

Dividends

In ~~February~~August 2021, the ~~Company’s~~ Board of Directors ~~(the “Board of Directors”)~~ declared a semi-annual cash dividend of $0.10 per share for Class A Common Stock and Class B Common Stock. This dividend was paid on ~~April 14,~~October 13, 2021 to stockholders of record as of ~~March 17,~~September 15, 2021. The timing, declaration, amount and payment of future dividends to stockholders, if any, is within the discretion of the Board of Directors. The Board of Directors’ decisions regarding the payment of future dividends will depend on many factors, including the Company’s financial condition, earnings, capital requirements and debt facility covenants, other contractual restrictions, as well as legal requirements, regulatory constraints, industry practice, market volatility and other factors that the Board of Directors deems relevant.

NOTE 8. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

In accordance with ASC 820, “Fair Value Measurements” (“ASC 820”) fair value measurements are required to be disclosed using a three-tiered fair value hierarchy which distinguishes market participant assumptions into the following categories:

•Level 1 — Quoted prices in active markets for identical assets or liabilities.

•Level 2 — Observable inputs other than quoted prices included in Level 1. The Company could value assets and liabilities included in this level using dealer and broker quotations, certain pricing models, bid prices, quoted prices for similar assets and liabilities in active markets or other inputs that are observable or can be corroborated by observable market data.

•Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. For the Company, this primarily includes the use of forecasted financial information and other valuation related assumptions such as discount rates and long term growth rates in the income approach as well as the market approach which utilizes certain market and transaction multiples.

Under ASC 820, certain assets and liabilities are required to be remeasured to fair value at the end of each reporting period.

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NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes those assets and liabilities measured at fair value on a recurring basis:


		As of March 31, 2021								As of June 30, 2020									As of December 31, 2021								As of June 30, 2021
		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
		(in millions)																	(in millions)
Assets:	Assets:																	Assets:

Foreign currency derivatives - cash flow hedges																		Foreign currency derivatives - cash flow hedges	$	—	$	1	$	—	$	1	$	—	$	—	$	—	$	—
Interest rate derivatives - cash flow hedges																		Interest rate derivatives - cash flow hedges	—		3		—		3		—		—		—		—
Cross-currency interest rate derivatives - fair value hedges	Cross-currency interest rate derivatives - fair value hedges	$	0	$	17	$	0	$	17	$	0	$	24	$	0	$	24	Cross-currency interest rate derivatives - fair value hedges	—		20		—		20		—		18		—		18

Cross-currency interest rate derivatives - cash flow hedges		0		0		0		0		0		98		0		98
Cross-currency interest rate derivatives (a)		0		71		0		71		0		0		0		0
Equity securities(b)		152		0		116		268		54		0		123		177

Cross-currency interest rate derivatives																		Cross-currency interest rate derivatives	—		81		—		81		—		73		—		73
Equity securities(a)																		Equity securities(a)	187		—		103		290		164		—		116		280
Total assets	Total assets	$	152	$	88	$	116	$	356	$	54	$	122	$	123	$	299	Total assets	$	187	$	105	$	103	$	395	$	164	$	91	$	116	$	371
Liabilities:	Liabilities:																	Liabilities:
Foreign currency derivatives - cash flow hedges		$	0	$	1	$	0	$	1	$	0	$	3	$	0	$	3

Interest rate derivatives - cash flow hedges	Interest rate derivatives - cash flow hedges	0		12		0		12		0		16		0		16		Interest rate derivatives - cash flow hedges	$	—	$	5	$	—	$	5	$	—	$	9	$	—	$	9

Cross-currency interest rate derivatives - cash flow hedges		0		0		0		0		0		18		0		18
Cross-currency interest rate derivatives (a)		0		15		0		15		0		0		0		0

Cross-currency interest rate derivatives																		Cross-currency interest rate derivatives	—		8		—		8		—		13		—		13
Total liabilities	Total liabilities	$	0	$	28	$	0	$	28	$	0	$	37	$	0	$	37	Total liabilities	$	—	$	13	$	—	$	13	$	—	$	22	$	—	$	22

(a)The Company determined that its cross-currency interest rate derivatives are no longer considered highly effective as of December 31, 2020 primarily due to changes in foreign exchange and interest rates.

~~(b)~~See Note 5—Investments.

During the ~~three~~six months ended December 31, ~~2020,~~2021, the Company reclassified its investment in ~~Tremor~~an equity security from Level 3 to Level 1 within the fair value hierarchy as the ~~sale restrictions are expected to lapse within 12 months.~~investment became publicly traded in the first quarter of fiscal 2022.

Equity securities

The fair values of equity securities with quoted prices in active markets are determined based on the closing price at the end of each reporting period. These securities are classified as Level 1 in the fair value hierarchy outlined above. The fair values of equity securities without readily determinable fair market values are determined based on cost, less any impairment, plus or minus changes in fair value resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. These securities are classified as Level 3 in the fair value hierarchy outlined above.

A rollforward of the Company’s equity securities classified as Level 3 is as follows:


		For the nine months ended March 31,					For the six months ended December 31,
		2021		2020			2021		2020
		(in millions)					(in millions)
Balance - beginning of period	Balance - beginning of period	$	123	$	113	Balance - beginning of period	$	116	$	123
Additions~~(a)~~	Additions~~(a)~~	10		17		Additions~~(a)~~	15		6

Returns of capital						Returns of capital	(33)		(2)
Measurement adjustments	Measurement adjustments	21		(3)		Measurement adjustments	28		21
Foreign exchange and other(b)		(38)		(2)
Foreign exchange and other(a)						Foreign exchange and other(a)	(23)		(31)
Balance - end of period	Balance - end of period	$	116	$	125	Balance - end of period	$	103	$	117

(a)~~Includes purchases of~~ During the six months ended December 31, 2021, the Company reclassified its investment in an equity ~~securities as well~~security from Level 3 to Level 1 within the fair value hierarchy as the ~~equity securities received as consideration for the sale of Unruly to Tremor~~investment became publicly traded in the ~~third~~first quarter of fiscal ~~2020.~~

~~(b)~~2022. During the three months ended December 31, 2020, the Company reclassified its investment in Tremor from Level 3 to Level 1 within the fair value hierarchy, as the sale restrictions ~~are~~were expected to lapse within 12 months.

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Derivative Instruments

The Company is directly and indirectly affected by risks associated with changes in certain market conditions. When deemed appropriate, the Company uses derivative instruments to mitigate the potential impact of these market risks. The primary market risks managed by the Company through the use of derivative instruments include:

•foreign currency exchange rate risk: arising primarily through Foxtel Debt Group borrowings denominated in United States (“U.S.”) dollars, payments for customer premise equipment and certain programming rights; and

•interest rate risk: arising from fixed and floating rate Foxtel Debt Group borrowings.

The Company formally designates qualifying derivatives as hedge relationships (“hedges”) and applies hedge accounting when considered appropriate. The Company does not use derivative financial instruments for trading or speculative purposes. For economic hedges where no hedge relationship has been designated or hedge accounting has been discontinued, changes in fair value are included as a component of net income in each reporting period within Other, net in the Statements of Operations. When a derivative is determined not to be highly effective as a hedge or the underlying hedged transaction is no longer probable, the Company discontinues hedge accounting prospectively.

Upon adoption of ASU 2017-12 as of July 1, 2019, the Company reclassified $5 million in gains from Accumulated deficit to Accumulated other comprehensive loss related to amounts previously recorded for the ineffective portion of outstanding derivative instruments designated as cash flow hedges. During the three and nine months ended March 31, 2021 and 2020, the Company excluded the currency basis from the changes in fair value of the derivative instruments from the assessment of hedge effectiveness.

Derivatives are classified as current or non-current in the Balance Sheets based on their maturity dates. Refer to the table below for further details:

Balance Sheet Location As of March 31,
2021 As of June 30,
2020
(in millions)
Cross-currency interest rate derivatives - fair value hedges Other non-current assets $ 17 $ 24
Cross-currency interest rate derivatives - cash flow hedges Other non-current assets 0 98
Cross-currency interest rate derivatives (a)
Other non-current assets 71 0
Foreign currency derivatives - cash flow hedges Other current liabilities (1) (3)
Interest rate derivatives - cash flow hedges Other non-current liabilities (12) (16)
Cross-currency interest rate derivatives - cash flow hedges Other non-current liabilities 0 (18)
Cross-currency interest rate derivatives (a)
Other non-current liabilities (15) 0

~~(a)~~The Company determined that its cross-currency interest rate derivatives are no longer considered highly effective as of December 31, 2020 primarily due to changes in foreign exchange and interest rates.


	Balance Sheet Location	As of December 31, 2021		As of June 30, 2021
		(in millions)
Foreign currency derivatives - cash flow hedges	Other current assets	$	1	$	—
Cross currency interest rate derivatives - fair value hedges	Other current assets	11		—

Cross currency interest rate derivatives	Other current assets	45		—
Interest rate derivatives - cash flow hedges	Other non-current assets	3		—
Cross-currency interest rate derivatives - fair value hedges	Other non-current assets	9		18

Cross-currency interest rate derivatives	Other non-current assets	36		73

Interest rate derivatives - cash flow hedges	Other current liabilities	(5)		(6)
Cross-currency interest rate derivatives	Other current liabilities	(2)		—
Interest rate derivatives - cash flow hedges	Other non-current liabilities	—		(3)
Cross-currency interest rate derivatives	Other non-current liabilities	(6)		(13)

Cash flow hedges

The Company utilizes a combination of foreign currency derivatives and interest rate derivatives to mitigate currency exchange rate risk and interest rate risk in relation to future interest and principal payments and payments for customer premise equipment and certain programming rights.

The total notional value of foreign currency contract derivatives designated for hedging was ~~$11~~$28 million as of ~~March~~December 31, 2021. The maximum hedged term over which the Company is hedging exposure to foreign currency fluctuations is less than one year. As of ~~March~~December 31, 2021, the Company estimates that approximately ~~$1 million~~nil of net derivative losses related to its foreign currency contract derivative cash flow hedges included in Accumulated other comprehensive loss will be reclassified into the Statements of Operations within the next 12 months.

The total notional value of interest rate swap derivatives designated for hedging was approximately A$~~300~~550 million as of ~~March~~December 31, 2021. The maximum hedged term over which the Company is hedging exposure to variability in interest payments is to ~~September 2022.~~May 2024. As of ~~March~~December 31, 2021, the Company estimates that approximately $5$3 million of net derivative losses

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related to its interest rate swap derivative cash flow hedges included in Accumulated other comprehensive loss will be reclassified into the Statements of Operations within the next 12 months.

Cash flow derivatives

The Company utilizes cross-currency interest rate derivatives to mitigate currency exchange and interest rate risk in relation to future interest and principal payments. The Company determined that these cash flow hedges no longer qualified as highly effective as of December 31, 2020 primarily due to changes in foreign exchange and interest rates. Amounts recognized in Accumulated other comprehensive loss during the periods the hedges were considered highly effective will continue to be

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reclassified out of Accumulated other comprehensive loss over the remaining term of the derivatives. Changes in the fair values of these derivatives will be recognized within Other, net in the Statements of Operations on a prospective basis.

The total notional value of cross-currency interest rate swaps for which the Company discontinued hedge accounting was approximately $280 million as of ~~March~~December 31, 2021. The maximum hedged term over which the Company is hedging exposure to variability in interest and principal payments is to July 2024. As of ~~March~~December 31, 2021, the Company estimates that approximately $5$3 million of net derivative gains related to its cross-currency interest rate swap derivative cash flow hedges included in Accumulated other comprehensive loss will be reclassified into the Statements of Operations within the next 12 months.

The following tables present the impact that changes in the fair values had on Accumulated other comprehensive loss and the Statements of Operations during the three and ~~nine~~six months ended ~~March~~December 31, 2021 and 2020 for both derivatives designated as cash flow hedges that continue to be highly effective and derivatives initially designated as cash flow hedges but for which hedge accounting was discontinued as of December 31, 2020:


		Gain (loss) recognized in Accumulated Other Comprehensive Loss for the three months ended March 31,				(Gain) loss reclassified from Accumulated Other Comprehensive Loss for the three months ended March 31,				Income statement location		Gain (loss) recognized in Accumulated Other Comprehensive Loss for the three months ended December 31,				(Gain) loss reclassified from Accumulated Other Comprehensive Loss for the three months ended December 31,				Income statement location
		2021		2020		2021		2020				2021		2020		2021		2020
		(in millions)										(in millions)
Foreign currency derivatives - cash flow hedges	Foreign currency derivatives - cash flow hedges	$	3	$	5	$	0	$	(1)	Operating expenses	Foreign currency derivatives - cash flow hedges	$	—	$	—	$	—	$	(1)	Operating expenses
Cross-currency interest rate derivatives	Cross-currency interest rate derivatives	0		43		(1)		(33)		Interest expense, net	Cross-currency interest rate derivatives	—		—		(1)		—		Interest expense, net
Interest rate derivatives - cash flow hedges	Interest rate derivatives - cash flow hedges	0		(3)		1		1		Interest expense, net	Interest rate derivatives - cash flow hedges	4		(1)		(1)		2		Interest expense, net
Total	Total	$	3	$	45	$	0	$	(33)		Total	$	4	$	(1)	$	(2)	$	1


		Gain (loss) recognized in Accumulated Other Comprehensive Loss for the nine months ended March 31,				(Gain) loss reclassified from Accumulated Other Comprehensive Loss for the nine months ended March 31,				Income statement location		Gain (loss) recognized in Accumulated Other Comprehensive Loss for the six months ended December 31,				(Gain) loss reclassified from Accumulated Other Comprehensive Loss for the six months ended December 31,				Income statement location
		2021		2020		2021		2020				2021		2020		2021		2020
		(in millions)										(in millions)
Foreign currency derivatives - cash flow hedges	Foreign currency derivatives - cash flow hedges	$	3	$	3	$	(1)	$	(3)	Operating expenses	Foreign currency derivatives - cash flow hedges	$	1	$	—	$	—	$	(1)	Operating expenses
Cross-currency interest rate derivatives	Cross-currency interest rate derivatives	(15)		35		12		(30)		Interest expense, net	Cross-currency interest rate derivatives	—		(15)		(2)		13		Interest expense, net
Interest rate derivatives - cash flow hedges	Interest rate derivatives - cash flow hedges	(1)		(6)		4		(4)		Interest expense, net	Interest rate derivatives - cash flow hedges	6		(1)		(2)		3		Interest expense, net
Total	Total	$	(13)	$	32	$	15	$	(37)		Total	$	7	$	(16)	$	(4)	$	15

The ~~gain~~amounts recognized in Other, net in the Statements of Operations resulting from the changes in fair value of cross-currency interest rate derivatives that were discontinued as cash flow hedges due to hedge ineffectiveness as of December 31, 2020 was a gain of approximately $5$8 million and $7$17 million for the three and ~~nine~~six months ended ~~March~~December 31, 2021, respectively, and ~~was recognized in Other, net in~~a loss of approximately $2 million for the ~~Statements of Operations.~~three and six months ended December 31, 2020.

Fair value hedges

Borrowings issued at fixed rates and in U.S. dollars expose the Company to fair value interest rate risk and currency exchange rate risk. The Company manages fair value interest rate risk and currency exchange rate risk through the use of cross-currency

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interest rate swaps under which the Company exchanges fixed interest payments equivalent to the interest payments on the U.S. dollar denominated debt for floating rate Australian dollar denominated interest payments. The changes in fair value of derivatives designated as fair value hedges and the offsetting changes in fair value of the hedged items are recognized in Other, net. For the ~~nine~~six months ended ~~March~~December 31, 2021, such adjustments ~~increased~~decreased the carrying value of borrowings by ~~NaN.~~nil.

The total notional value of the fair value hedges was approximately $70 million as of ~~March~~December 31, 2021. The maximum hedged term over which the Company is hedging exposure to variability in interest payments is to July 2024.

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During the ~~nine~~three and six months ended ~~March~~December 31, 2021 and 2020, the amount recognized in the Statements of Operations on derivative instruments designated as fair value hedges related to the ineffective portion was nil and $1 million, ~~and NaN,~~ respectively, and the Company excluded the currency basis from the changes in fair value of the derivative instruments from the assessment of hedge effectiveness.

The following sets forth the effect of fair value hedging relationships on hedged items in the Balance Sheets as of ~~March~~December 31, 2021 and June 30, ~~2020:~~2021:


		As of March 31, 2021		As of June 30, 2020			As of December 31, 2021		As of June 30, 2021
		(in millions)					(in millions)
Borrowings:	Borrowings:					Borrowings:
Carrying amount of hedged item	Carrying amount of hedged item	$	71	$	71	Carrying amount of hedged item	$	71	$	71
Cumulative hedging adjustments included in the carrying amount	Cumulative hedging adjustments included in the carrying amount	5		6		Cumulative hedging adjustments included in the carrying amount	3		5

Other Fair Value Measurements

As of ~~March~~December 31, 2021, the carrying value of the Company’s outstanding borrowings approximates the fair value. The 2021 Senior Notes and the U.S. private placement borrowings are classified as Level 2 and the remaining borrowings are classified as Level 3 in the fair value hierarchy.

NOTE 9. EARNINGS (LOSS) PER SHARE

The following tables set forth the computation of basic and diluted earnings (loss) per share under ASC 260, “Earnings per Share”:

For the three months ended
March 31, For the nine months ended
March 31,
2021 2020 2021 2020
(in millions, except per share amounts)
Net income (loss) $ 96 $ (1,036) $ 404 $ (1,144)
Less: Net (income) loss attributable to noncontrolling interests (17) 306 (60) 272
Net income (loss) attributable to News Corporation stockholders $ 79 $ (730) $ 344 $ (872)
Weighted-average number of shares of common stock outstanding - basic 590.8 588.3 590.3 587.7
Dilutive effect of equity awards(a)
3.7 0 2.3 0
Weighted-average number of shares of common stock outstanding - diluted 594.5 588.3 592.6 587.7
Net income (loss) attributable to News Corporation stockholders per share - basic and diluted $ 0.13 $ (1.24) $ 0.58 $ (1.48)

~~(a)~~The dilutive impact of the Company’s performance stock units, restricted stock units and stock options has been excluded from the calculation of diluted loss per share for the three and nine months ended March 31, 2020 because their inclusion would have an antidilutive effect on the net loss per share.


	For the three months ended December 31,				For the six months ended December 31,
	2021		2020		2021		2020
	(in millions, except per share amounts)
Net income	$	262	$	261	$	529	$	308
Less: Net income attributable to noncontrolling interests	(27)		(30)		(98)		(43)
Net income attributable to News Corporation stockholders	$	235	$	231	$	431	$	265
Weighted-average number of shares of common stock outstanding - basic	592.1		590.7		591.9		590.1
Dilutive effect of equity awards	2.6		1.9		2.7		1.6
Weighted-average number of shares of common stock outstanding - diluted	594.7		592.6		594.6		591.7
Net income attributable to News Corporation stockholders per share - basic	$	0.40	$	0.39	$	0.73	$	0.45
Net income attributable to News Corporation stockholders per share -diluted	$	0.40	$	0.39	$	0.72	$	0.45

NOTE 10. COMMITMENTS AND CONTINGENCIES

Commitments

The Company has commitments under certain firm contractual arrangements (“firm commitments”) to make future payments. These firm commitments secure the future rights to various assets and services to be used in the normal course of operations.

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The Company’s commitments as of ~~March~~December 31, 2021 have not changed significantly from the disclosures included in the ~~2020~~2021 Form ~~10-K and the Company’s Form 10-Q for the quarter ended December 31, 2020.~~10-K.

Contingencies

The Company routinely is involved in various legal proceedings, claims and governmental inspections or investigations, including those discussed below. The outcome of these matters and claims is subject to significant uncertainty, and the Company often cannot predict what the eventual outcome of pending matters will be or the timing of the ultimate resolution of

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these matters. Fees, expenses, fines, penalties, judgments or settlement costs which might be incurred by the Company in connection with the various proceedings could adversely affect its results of operations and financial condition.

The Company establishes an accrued liability for legal claims when it determines that a loss is both probable and the amount of the loss can be reasonably estimated. Once established, accruals are adjusted from time to time, as appropriate, in light of additional information. The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for such matters. Legal fees associated with litigation and similar proceedings are expensed as incurred. Except as otherwise provided below, for the contingencies disclosed for which there is at least a reasonable possibility that a loss may be incurred, the Company was unable to estimate the amount of loss or range of loss. The Company recognizes gain contingencies when the gain becomes realized or realizable.

News America Marketing

In May 2020, the Company sold its News America Marketing business. In the transaction, the Company retained certain liabilities, including those arising from the legal proceedings with Insignia Systems, Inc. (“Insignia”) and Valassis Communications, Inc. (“Valassis”) described below.

Insignia Systems, Inc.

On July 11, 2019, Insignia filed a complaint in the U.S. District Court for the District of Minnesota against News America Marketing FSI L.L.C. (“NAM ~~FSI”~~FSI��), News America Marketing In-Store Services L.L.C. (“NAM In-Store”) and News Corporation (together, the “NAM Parties”) alleging violations of federal and state antitrust laws and common law business torts. The complaint seeks treble damages, injunctive relief and attorneys’ fees and costs. On August 14, 2019, the NAM Parties answered the complaint and asserted a counterclaim against Insignia for breach of contract, alleging that Insignia violated a prior settlement agreement between NAM In-Store and Insignia. On July 10, 2020, ~~each of~~ the NAM Parties ~~and Insignia~~ filed a motion for summary judgment on the ~~counterclaim. On December 7, 2020, the court denied Insignia’s motion and~~counterclaim, which was granted ~~the NAM Parties’ motion~~ in part and denied it in ~~part.~~part on December 7, 2020. The court found that Insignia had breached the prior settlement agreement and struck the allegations in Insignia’s complaint that violated the agreement. On August 27, 2021, the NAM Parties filed a motion for summary judgment dismissing the case, which Insignia has opposed. While it is not possible at this time to predict with any degree of certainty the ultimate outcome of this action, the NAM Parties believe they have been compliant with applicable laws and intend to defend themselves vigorously.

Valassis Communications, Inc.

OnIn November 8, 2013, Valassis filed a complaint in the U.S. District Court for the Eastern District of Michigan ~~(the “District Court”)~~ against the NAM Parties and News America Incorporated, (together, the “NAM Group”) alleging violations of federal and state antitrust laws and common law business torts. The complaint seeks treble damages, injunctive relief and attorneys’ fees and costs.

On December 19, 2013, the NAM Group filed a motion to dismiss the complaint and on March 30, 2016, the District Court dismissed Valassis’s bundling and tying claims. On September 25, 2017, the District Court granted Valassis’s motion to transfer the casewhich was subsequently transferred to the U.S. District Court for the Southern District of New York (the “N.Y. District Court”). ~~On April 13, 2018,~~The complaint alleged violations of federal and state antitrust laws and common law business torts and sought treble damages, injunctive relief and attorneys’ fees and costs. The trial began on June 29, 2021, and in July 2021, the ~~NAM Group filed a motion for summary judgment dismissing~~parties agreed to settle the ~~case which was granted in part~~litigation and denied in part by the N.Y. District Court on February 21, 2019. The N.Y. District Court found that the NAM Group’s bidding practices were lawful but denied its motion with respect to claims arising out of certain other alleged contracting practices. In addition, the N.Y. District Court also dismissed Valassis’s claims ~~relating to free-standing insert products. The N.Y. District Court has set a trial date of June 30, 2021. While it is not possible at this time to predict~~were dismissed with ~~any degree of certainty the ultimate outcome of this action, the NAM Group believes it has been compliant with applicable laws and intends to defend itself vigorously.~~

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prejudice.

HarperCollins

Beginning in February 2021, a number of purported class action complaints have been filed in the N.Y. District Court against Amazon.com, Inc. (“Amazon”) and certain publishers, including the Company’s subsidiary, HarperCollins Publishers, L.L.C. (“HarperCollins” and together with the other publishers, the “Publishers”), alleging violations of antitrust and competition laws. The complaints seek treble damages, injunctive relief and attorneys’ fees and costs. In September 2021, Amazon and the Publishers filed motions to dismiss the complaints, which the plaintiffs have opposed. While it is not possible at this time to predict with any degree of certainty the ultimate outcome of these actions, HarperCollins believes it has been compliant with applicable laws and intends to defend itself vigorously.

U.K. Newspaper Matters

Civil claims have been brought against the Company with respect to, among other things, voicemail interception and inappropriate payments to public officials at the Company’s former publication, The News of the World, and at The Sun, and related matters (the “U.K. Newspaper Matters”). The Company has admitted liability in many civil cases and has settled a number of cases. The Company also settled a number of claims through a private compensation scheme which was closed to new claims after April 8, 2013.

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In connection with the separation of the Company from Twenty-First Century Fox, Inc. (“21st Century Fox”) on June 28, 2013, the Company and 21st Century Fox agreed in the Separation and Distribution Agreement that 21st Century Fox would indemnify the Company for payments made after such date arising out of civil claims and investigations relating to the U.K. Newspaper Matters as well as legal and professional fees and expenses paid in connection with the previously concluded criminal matters, other than fees, expenses and costs relating to employees (i) who are not directors, officers or certain designated employees or (ii) with respect to civil matters, who are not co-defendants with the Company or 21st Century Fox. 21st Century Fox’s indemnification obligations with respect to these matters are settled on an after-tax basis. In March 2019, as part of the separation of ~~Fox~~FOX Corporation (“FOX”) from 21st Century Fox, the Company, News Corp Holdings UK & Ireland, 21st Century Fox and FOX entered into a Partial Assignment and Assumption Agreement, pursuant to which, among other things, 21st Century Fox assigned, conveyed and transferred to FOX all of its indemnification obligations with respect to the U.K. Newspaper Matters.

The net expense related to the U.K. Newspaper Matters in Selling, general and administrative was $3$4 million and $4$3 million for the three months ended ~~March~~December 31, 2021 and 2020, respectively, and $8$6 million and $5 million for the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020, respectively. As of ~~March~~December 31, 2021, the Company has provided for its best estimate of the liability for the claims that have been filed and costs incurred, including liabilities associated with employment taxes, and has accrued approximately ~~$43~~$46 million. The amount to be indemnified by FOX of approximately ~~$52~~$59 million was recorded as a receivable in Other current assets on the Balance Sheet as of ~~March~~December 31, 2021. The net expense for the nine months ended March 31, 2020 reflects a $5 million impact from the reversal of a portion of the Company’s previously accrued liability and the corresponding receivable from FOX as the result of an agreement reached with the relevant tax authority with respect to certain employment taxes. It is not possible to estimate the liability or corresponding receivable for any additional claims that may be filed given the information that is currently available to the Company. If more claims are filed and additional information becomes available, the Company will update the liability provision and corresponding receivable for such matters.

The Company is not able to predict the ultimate outcome or cost of the civil claims. It is possible that these proceedings and any adverse resolution thereof could damage its reputation, impair its ability to conduct its business and adversely affect its results of operations and financial condition.

Other

The Company believes it has appropriately accrued for the expected outcome of uncertain tax matters and believes such liabilities represent a reasonable provision for taxes ultimately expected to be paid; however, these liabilities may need to be adjusted as new information becomes known and as tax examinations continue to progress, or as settlements or litigations occur.

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NOTE 11. INCOME TAXES

At the end of each interim period, the Company estimates the annual effective tax rate and applies that rate to its ordinary quarterly earnings. The tax expense or benefit related to significant, unusual or extraordinary items that will be separately reported or reported net of their related tax effect are individually computed and recognized in the interim period in which those items occur. In addition, the effects of changes in enacted tax laws or rates or tax status are recognized in the interim period in which the change occurs. The changing and volatile macro-economic conditions connected with COVID-19 may cause fluctuations in forecasted earnings before income taxes. As such, the Company’s effective tax rate could be subject to volatility as forecasted earnings before income taxes are impacted by events which are highly uncertain and cannot be predicted.

For the three months ended ~~March~~December 31, 2021, the Company recorded income tax expense of ~~$43~~$99 million on pre-tax income of ~~$139~~$361 million, resulting in an effective tax rate that was higher than the U.S. statutory tax rate. The tax rate was impacted by foreign operations which are subject to higher tax rates and by changes in valuation allowances.

For the six months ended December 31, 2021, the Company recorded income tax expense of $170 million on pre-tax income of $699 million, resulting in an effective tax rate that was higher than the U.S. statutory tax rate. The tax rate was impacted by foreign operations which are subject to higher tax rates and changes in valuation allowances, offset by the lower tax impact related to the acquisition of an 18% interest in PropertyGuru.

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primarily due to valuation allowances being recorded against tax benefits in certain foreign jurisdictions with operating losses and the impact of foreign operations which are subject to higher tax ~~rates.~~rates, offset by a remeasurement of deferred taxes in the U.K.

For the ~~nine~~six months ended ~~March~~December 31, ~~2021,~~2020, the Company recorded income tax expense of ~~$153~~$110 million on pre-tax income of ~~$557~~$418 million, resulting in an effective tax rate that was higher than the U.S. statutory tax rate. The higher tax rate was primarily due to valuation allowances being recorded against tax benefits in certain foreign jurisdictions with operating losses and the impact of foreign operations which are subject to higher tax rates, offset by a remeasurement of deferred taxes in the U.K.

For the three months ended March 31, 2020, the Company recorded an income tax benefit of $10 million on a pre-tax loss of $1,046 million, resulting in an effective tax rate that was lower than the U.S. statutory tax rate. The tax rate was impacted by the non-cash impairment of Foxtel’s goodwill and indefinite-lived intangible assets, which had no tax benefit, by valuation allowances being recorded against tax benefits in certain foreign jurisdictions with operating losses, and by the impact of foreign operations which are subject to higher tax rates.

For the nine months ended March 31, 2020, the Company recorded income tax expense of $21 million on a pre-tax loss of $1,123 million, resulting in an effective tax rate that was lower than the U.S. statutory tax rate. The tax rate was impacted by the non-cash impairment of Foxtel’s goodwill and indefinite-lived intangible assets, which had no tax benefit, a lower tax benefit recorded on the impairment of News America Marketing’s goodwill in prior quarters, by valuation allowances being recorded against tax benefits in certain foreign jurisdictions with operating losses, and by the impact of foreign operations which are subject to higher tax rates.

Management assesses available evidence to determine whether sufficient future taxable income will be generated to permit the use of existing deferred tax assets. Based on management’s assessment of available evidence, it has been determined that it is more likely than not that deferred tax assets in certain foreign jurisdictions may not be realized and therefore, a valuation allowance has been established against those tax assets.

The Company’s tax returns are subject to on-going review and examination by various tax authorities. Tax authorities may not agree with the treatment of items reported in the Company’s tax returns, and therefore the outcome of tax reviews and examinations can be unpredictable. The Company is currently undergoing tax examinations in various U.S. state and foreign jurisdictions. ~~During~~The Company is currently undergoing an audit with the nine months ended March 31, 2021, the statute of limitations related to our U.S. federal income tax returns for the fiscal years ended June 30, 2014 and 2016 expired. No adjustments to our tax provision were recorded as a result of these statute expirations. The Internal Revenue Service ~~has commenced an audit~~ for the fiscal year ended June 30, 2018. The Company believes it has appropriately accrued for the expected outcome of uncertain tax matters and believes such liabilities represent a reasonable provision for taxes ultimately expected to be paid. However, the Company may need to accrue additional income tax expense and its liability may need to be adjusted as new information becomes known and as these tax examinations continue to progress, or as settlements or litigations occur.

The Company paid gross income taxes of ~~$131~~$92 million and ~~$93~~$98 million during the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020, respectively, and received tax refunds of ~~$11~~$1 million and $5$9 million, respectively.

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NOTE 12. SEGMENT INFORMATION

The Company manages and reports its businesses in the following 6 segments:

•Digital Real Estate Services—The Digital Real Estate Services segment consists of the Company’s 61.4% interest in REA Group and 80% interest in Move. The remaining 20% interest in Move is held by REA Group. REA Group is a market-leading digital media business specializing in property and is listed on the Australian Securities Exchange (“ASX”) (ASX: REA). REA Group advertises property and property-related services on its websites and mobile apps, ~~across Australia, India and Asia,~~ including Australia’s leading residential, commercial and share property websites, realestate.com.au, realcommercial.com.au and Flatmates.com.au, and property portals in ~~India and Asia.~~India. In addition, REA Group provides property-related data to the financial sector and financial services through an end-to-end digital property search and financing experience and a mortgage broking offering.

Move is a leading provider of digital real estate services in the U.S. and primarily operates realtor.com®, a premier real estate information, advertising and services ~~marketplace.~~platform. Move offers real estate advertising solutions to agents and brokers, including its ConnectionsSM Plus, Market VIPSMand AdvantageSM Pro products as well as its referral-based ~~services.~~service, Ready Connect Concierge. Move also offers online tools and services to do-it-yourself landlords and tenants, as well as ~~a number of~~ professional software and services ~~products, including ListHub~~™.products.

•Subscription Video Services—The Company’s Subscription Video Services segment provides ~~video~~ sports, entertainment and news services to pay-TV and streaming subscribers and other commercial licensees, primarily via cable, satellite and internet distribution, and consists of (i) the Company’s 65% interest in the Foxtel Group (with the remaining 35% interest ~~in Foxtel~~ held by Telstra, an ASX-listed telecommunications company) and (ii) Australian News Channel (“ANC”). The Foxtel Group is the largest ~~pay-TV~~Australian-based subscription television provider, ~~in Australia,~~ with nearly 200 channels covering sports, general entertainment, movies, documentaries, music, children’s programming and news. Foxtel ~~offers~~and the Kayo Sports streaming service offer the leading sports programming content in Australia, with broadcast rights to live sporting events including: National Rugby League, Australian Football League, Cricket Australia ~~the domestic football league~~ and various motorsports programming. The Foxtel Group also operates BINGE, its on-demand entertainment streaming service, and Foxtel Now, ~~an over-the-top, or OTT,~~a streaming service that provides access across Foxtel’s live and on-demand ~~content, Kayo, its sports OTT service, and Binge, its recently~~content. In October 2021, the Foxtel Group launched ~~on-demand entertainment OTT~~Flash, a news aggregation streaming service.

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NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

ANC operates the SKY NEWS network, Australia’s 24-hour multi-channel, multi-platform news service. ANC channels are distributed throughout Australia and New Zealand and available on Foxtel and Sky Network Television NZ. ANC also owns and operates the international Australia Channel IPTV service and offers content across a variety of digital media platforms, including web, mobile and ~~third party~~third-party providers.

•Dow Jones—The Dow Jones segment consists of Dow Jones, a global provider of news and business information, which distributes its content and data through a variety of media channels including newspapers, newswires, websites, applications, or apps, for mobile devices, tablets and e-book readers, newsletters, magazines, proprietary databases, live journalism, video and podcasts. The Dow ~~Jones’s~~Jones segment’s products, which target individual ~~consumer~~consumers and enterprise customers, include The Wall Street Journal, Factiva, Dow Jones Risk & Compliance, Dow Jones Newswires, Barron’s, MarketWatch and ~~MarketWatch.~~Investor’s Business Daily.

•Book Publishing—The Book Publishing segment consists of HarperCollins, the second largest consumer book publisher in the world, with operations in 17 countries and particular strengths in general fiction, nonfiction, children’s and religious publishing. HarperCollins owns more than 120 branded publishing imprints, including Harper, William Morrow, HarperCollins Children’s Books, Avon, Harlequin and Christian publishers Zondervan and Thomas Nelson, and publishes works by well-known authors such as Harper Lee, ~~Chip and Joanna Gaines, David Walliams, Angie Thomas, Sarah Young and~~George Orwell, Agatha Christie and ~~popular titles such~~Zora Neale Hurston, as ~~The Hobbit, Goodnight Moon, To Kill~~well as global author brands including J.R.R. Tolkien, C.S. Lewis, Daniel Silva, Karin Slaughter and Dr. Martin Luther King, Jr. It is also home to many beloved children’s books and authors and a ~~Mockingbird, Jesus Calling~~ ~~and~~ ~~The Hate U Give~~.significant Christian publishing business.

•News Media—The News Media segment consists primarily of News Corp Australia, News UK and the New York Post and includes, among other publications, The Australian, The Daily Telegraph, Herald Sun, The Courier Mail and The Advertiser in Australia and The Times, The Sunday Times, The Sun and The Sun on Sunday in the U.K. This segment also includes Wireless Group, operator of talkSPORT, the leading sports radio network in the U.K., and Storyful, a social media content agency. ~~The segment included News America Marketing until the completion of the sale of the business on May 5, 2020.~~

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~~NEWS CORPORATION~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

•Other—The Other segment consists primarily of general corporate overhead expenses, ~~the corporate Strategy Group,~~ costs related to the U.K. Newspaper Matters and transformation costs associated with the Company’s ~~global shared services program.~~ongoing cost reduction initiatives.

Segment EBITDA is defined as revenues less operating expenses and selling, general and administrative expenses. Segment EBITDA does not include: depreciation and amortization, impairment and restructuring charges, equity losses of affiliates, interest (expense) income, net, other, net and income tax (expense) benefit. Segment EBITDA may not be comparable to similarly titled measures reported by other companies, since companies and investors may differ as to what items should be included in the calculation of Segment EBITDA.

Segment EBITDA is the primary measure used by the Company’s chief operating decision maker to evaluate the performance of and allocate resources within the Company’s businesses. Segment EBITDA provides management, investors and equity analysts with a measure to analyze the operating performance of each of the Company’s business segments and its enterprise value against historical data and competitors’ data, although historical results may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences).

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NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Segment information is summarized as follows:


		For the three months ended March 31,				For the nine months ended March 31,					For the three months ended December 31,				For the six months ended December 31,
		2021		2020		2021		2020			2021		2020		2021		2020
		(in millions)									(in millions)
Revenues:	Revenues:									Revenues:
Digital Real Estate Services	Digital Real Estate Services	$	351	$	261	$	980	$	827	Digital Real Estate Services	$	456	$	339	$	882	$	629
Subscription Video Services	Subscription Video Services	523		462		1,530		1,477		Subscription Video Services	498		511		1,008		1,007
Dow Jones	Dow Jones	421		397		1,253		1,209		Dow Jones	508		446		952		832
Book Publishing	Book Publishing	490		412		1,492		1,259		Book Publishing	617		544		1,163		1,002
News Media	News Media	550		733		1,610		2,311		News Media	638		573		1,214		1,060
Other	Other	0		1		1		2		Other	—		1		—		1
Total revenues	Total revenues	$	2,335	$	2,266	$	6,866	$	7,085	Total revenues	$	2,717	$	2,414	$	5,219	$	4,531
Segment EBITDA:	Segment EBITDA:									Segment EBITDA:
Digital Real Estate Services	Digital Real Estate Services	$	117	$	74	$	378	$	274	Digital Real Estate Services	$	178	$	142	$	316	$	261
Subscription Video Services	Subscription Video Services	91		68		293		219		Subscription Video Services	86		124		200		202
Dow Jones	Dow Jones	82		51		263		176		Dow Jones	144		109		239		181
Book Publishing	Book Publishing	80		55		255		167		Book Publishing	107		104		192		175
News Media	News Media	8		24		52		97		News Media	111		66		145		44
Other	Other	(80)		(30)		(178)		(115)		Other	(40)		(48)		(96)		(98)
Depreciation and amortization	Depreciation and amortization	(173)		(160)		(504)		(484)		Depreciation and amortization	(168)		(167)		(333)		(331)
Impairment and restructuring charges	Impairment and restructuring charges	(30)		(1,125)		(93)		(1,451)		Impairment and restructuring charges	(23)		(23)		(45)		(63)
Equity losses of affiliates	Equity losses of affiliates	(5)		(7)		(9)		(12)		Equity losses of affiliates	(6)		(3)		(6)		(4)
Interest expense, net	Interest expense, net	(12)		(9)		(32)		(13)		Interest expense, net	(21)		(12)		(43)		(20)
Other, net	Other, net	61		13		132		19		Other, net	(7)		54		130		71
Income (loss) before income tax (expense) benefit		139		(1,046)		557		(1,123)
Income tax (expense) benefit		(43)		10		(153)		(21)
Net income (loss)		$	96	$	(1,036)	$	404	$	(1,144)
Income before income tax expense										Income before income tax expense	361		346		699		418
Income tax expense										Income tax expense	(99)		(85)		(170)		(110)
Net income										Net income	$	262	$	261	$	529	$	308


	As of December 31, 2021		As of June 30, 2021
	(in millions)
Total assets:
Digital Real Estate Services	$	3,050	$	3,146
Subscription Video Services	3,334		3,515
Dow Jones	2,845		2,798
Book Publishing	2,837		2,713
News Media	2,106		2,209
Other(a)	1,843		2,039
Investments	505		351
Total assets	$	16,520	$	16,771

(a)The Other segment primarily includes Cash and cash equivalents.

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NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2021 As of June 30,
2020
(in millions)
Total assets:
Digital Real Estate Services $ 2,660 $ 2,322
Subscription Video Services 3,618 3,459
Dow Jones 2,457 2,480
Book Publishing 2,386 2,212
News Media 2,320 1,994
Other(a)
1,565 1,497
Investments 391 297
Total assets $ 15,397 $ 14,261

~~(a)The Other segment primarily includes Cash and cash equivalents.~~


		As of March 31, 2021		As of June 30, 2020			As of December 31, 2021		As of June 30, 2021
		(in millions)					(in millions)
Goodwill and intangible assets, net:	Goodwill and intangible assets, net:					Goodwill and intangible assets, net:
Digital Real Estate Services	Digital Real Estate Services	$	1,778	$	1,555	Digital Real Estate Services	$	1,827	$	1,871
Subscription Video Services	Subscription Video Services	1,637		1,513		Subscription Video Services	1,506		1,612
Dow Jones	Dow Jones	1,713		1,722		Dow Jones	1,986		1,995
Book Publishing	Book Publishing	784		748		Book Publishing	1,017		1,046
News Media	News Media	307		277		News Media	303		308
Total Goodwill and intangible assets, net	Total Goodwill and intangible assets, net	$	6,219	$	5,815	Total Goodwill and intangible assets, net	$	6,639	$	6,832

NOTE 13. ADDITIONAL FINANCIAL INFORMATION

Receivables, net

Receivables are presented net of allowances, which reflect the Company’s expected credit losses based on historical experience as well as current and expected economic conditions.

Receivables, net consist of:


		As of March 31, 2021		As of June 30, 2020			As of December 31, 2021		As of June 30, 2021
		(in millions)					(in millions)
Receivables	Receivables	$	1,415	$	1,276	Receivables	$	1,738	$	1,569
Less: allowances	Less: allowances	(80)		(73)		Less: allowances	(73)		(71)
Receivables, net	Receivables, net	$	1,335	$	1,203	Receivables, net	$	1,665	$	1,498

Other Non-Current Assets

The following table sets forth the components of Other non-current assets:


	As of December 31, 2021		As of June 30, 2021
	(in millions)
Royalty advances to authors	$	398	$	406
Retirement benefit assets	134		120
Inventory(a)	262		279
News America Marketing deferred consideration	135		128
Other	456		514
Total Other non-current assets	$	1,385	$	1,447

(a)Primarily consists of the non-current portion of programming rights.

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NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Other ~~Non-Current Assets~~

~~The following table sets forth the components of Other non-current assets:~~

As of March 31,
2021 As of June 30,
2020
(in millions)
Royalty advances to authors $ 363 $ 348
Retirement benefit assets 130 94
Inventory(a)
292 133
News America Marketing deferred consideration 124 111
Other 310 353
Total Other non-current assets $ 1,219 $ 1,039

~~(a)~~The balance as of March 31, 2021 primarily consists of the non-current portion of programming rights. Upon adoption of ASU 2019-02, the Company reclassified the current portion of its programming rights, totaling $151 million, from Inventory, net to Other non-current assets. The Company’s programming rights are substantially all monetized as a film group.

~~Other~~ Current Liabilities

The following table sets forth the components of Other current liabilities:


		As of March 31, 2021		As of June 30, 2020			As of December 31, 2021		As of June 30, 2021
		(in millions)					(in millions)
Royalties and commissions payable	Royalties and commissions payable	$	239	$	169	Royalties and commissions payable	$	234	$	206
Current operating lease liabilities	Current operating lease liabilities	139		131		Current operating lease liabilities	143		143
Allowance for sales returns	Allowance for sales returns	188		174		Allowance for sales returns	210		190
Current tax payable	Current tax payable	6		50		Current tax payable	33		30

Other	Other	351		314		Other	380		504
Total Other current liabilities	Total Other current liabilities	$	923	$	838	Total Other current liabilities	$	1,000	$	1,073

Other, net

The following table sets forth the components of Other, net:


		For the three months ended March 31,				For the nine months ended March 31,					For the three months ended December 31,				For the six months ended December 31,
		2021		2020		2021		2020			2021		2020		2021		2020
		(in millions)									(in millions)
Remeasurement of equity securities	Remeasurement of equity securities	$	33	$	(17)	$	79	$	(22)	Remeasurement of equity securities	$	(9)	$	37	$	19	$	46
Dividends received from equity security investments	Dividends received from equity security investments	6		1		9		2		Dividends received from equity security investments	9		1		10		3
Gain on sale of businesses(a)		18		20		18		20
Gain on remeasurement of previously-held interest in Elara (Note 3)		0		0		7		0
(Loss) gain on sale of businesses(a)										(Loss) gain on sale of businesses(a)	(9)		—		98		—
Gain on remeasurement of previously-held interest(b)										Gain on remeasurement of previously-held interest(b)	3		7		3		7
Other	Other	4		9		19		19		Other	(1)		9		—		15
Total Other, net	Total Other, net	$	61	$	13	$	132	$	19	Total Other, net	$	(7)	$	54	$	130	$	71

(a)During the six months ended December 31, 2021, REA Group acquired an 18% interest in PropertyGuru in exchange for all shares of REA Group’s entities in Malaysia and Thailand. The Company recognized a gain of $107 million on the disposition of such entities.

(b) Relates to the acquisition of Elara in the three and ~~nine~~six months ended ~~March~~December 31, ~~2021, Move sold the assets associated with its Top Producer professional software and service product and recognized an $18 million gain on the sale.~~

During the three and nine months ended March 31, 2020, REA Group contributed its businesses located in Singapore and Indonesia into a joint venture with 99.co in return for an equity method investment in the combined entity. As a result of the deconsolidation of these entities, REA Group recognized a $20 million gain in Other, net.

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~~NEWS CORPORATION~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

2020.

Supplemental Cash Flow Information

The following table sets forth the Company’s cash paid for taxes and interest:


		For the nine months ended March 31,					For the six months ended December 31,
		2021		2020			2021		2020
		(in millions)					(in millions)
Cash paid for interest	Cash paid for interest	$	41	$	43	Cash paid for interest	$	49	$	28
Cash paid for taxes	Cash paid for taxes	$	131	$	93	Cash paid for taxes	$	92	$	98

NOTE 14. SUBSEQUENT EVENTS

~~Acquisition~~In February 2022, the Company’s Board of ~~Investor’s Business Daily~~

~~In May 2021, the Company acquired Investor’s Business Daily (“IBD”) from O’Neil Capital Management~~Directors declared a semi-annual cash dividend of $0.10 per share for ~~$275 million in cash. IBD~~Class A Common Stock and Class B Common Stock. The dividend is a digital-first financial news and research business with unique investor tools, research and analysis products, including the investors.com website. IBD will be operated by Dow Jones, and its results will be included in the Dow Jones segment. The Company is currently in the processpayable on April 13, 2022 to stockholders of ~~evaluating the purchase accounting implications, and as a result disclosures required under ASC 805-10-50-2(h) cannot be made at this time.~~

~~Senior Notes Offering~~

In April 2021, the Company issued $1 billion of senior notes due 2029 (the “2021 Senior Notes”). The 2021 Senior Notes will bear interest at a fixed rate of 3.875% per annum, payable in cash semi-annually on May 15 and November 15 of each year, commencing November 15, 2021. The notes will mature on May 15, 2029.

~~Agreement to acquire HMH Books & Media~~

In March 2021, the Company entered into an agreement to acquire the Books & Media segment of Houghton Mifflin Harcourt (“HMH Books & Media”) for $349 million in cash. HMH Books & Media publishes renowned and awarded children’s, young adult, fiction, non-fiction, culinary and reference titles. HMH Books & Media will be a subsidiary of HarperCollins and its results will be included in the Book Publishing segment. The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to close in the fourth quarter of fiscal 2021.

~~REA Group agreement to acquire Mortgage Choice~~

In March 2021, REA Group entered into an agreement to acquire Mortgage Choice Limited, a leading Australian mortgage broking business (“Mortgage Choice”), for approximately A$244 million in cash (approximately $186.5 million based on exchange ratesrecord as of the date of announcement), to be funded by an increase in REA Group’s syndicated debt facilities. Mortgage Choice will be a subsidiary of REA Group and its results will be included in the Digital Real Estate Services segment. The acquisition is subject to customary closing conditions, including Mortgage Choice shareholder, court and regulatory approvals and receipt of an independent expert opinion that the transaction is in the best interests of Mortgage Choice shareholders, and is expected to close in the fourth quarter of fiscal 2021.

March 16, 2022.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This document, including the following discussion and analysis, contains statements that constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended. All statements that are not statements of historical fact are forward-looking statements. The words “expect,” “will,” “estimate,” “anticipate,” “predict,” “believe” and similar expressions and variations thereof are intended to identify forward-looking statements. These statements appear in a number of places in this discussion and analysis and include statements regarding the intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things, trends affecting the Company’s financial condition or results of operations, ~~including expected impacts from the ongoing novel coronavirus (“COVID-19”) pandemic and related public health measures,~~ the Company’s strategy and strategic initiatives and the outcome of contingencies such as litigation and investigations. Readers are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and ~~uncertainties, including those related to COVID-19.~~uncertainties. More information regarding these risks and uncertainties ~~(many of which may be amplified by COVID-19)~~ and other important factors that could cause actual results to differ materially from those in the forward-looking statements is set forth under the heading “Risk Factors” in Part I, Item 1A. in News Corporation’s Annual Report on Form 10-K for the fiscal year ended June 30, ~~2020,~~2021, as filed with the Securities and Exchange Commission (the “SEC”) on August ~~11, 2020~~10, 2021 (the ~~“2020~~“2021 Form 10-K”), and as may be updated in this and other subsequent Quarterly Reports on Form 10-Q. The Company does not ordinarily make projections of its future operating results and undertakes no obligation (and expressly disclaims any obligation) to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Readers should carefully review this document and the other documents filed by the Company with the SEC. This section should be read together with the unaudited consolidated financial statements of News Corporation and related notes set forth elsewhere herein and the audited consolidated financial statements of News Corporation and related notes set forth in the ~~2020~~2021 Form 10-K.

INTRODUCTION

News Corporation (together with its subsidiaries, “News Corporation,” “News Corp,” the “Company,” “we,” or “us”) is a global diversified media and information services company comprised of businesses across a range of media, including: digital real estate services, subscription video services in Australia, news and information services and book publishing.

The unaudited consolidated financial statements are referred to herein as the “Consolidated Financial Statements.” The consolidated statements of operations are referred to herein as the “Statements of Operations.” The consolidated balance sheets are referred to herein as the “Balance Sheets.” The consolidated statements of cash flows are referred to herein as the “Statements of Cash Flows.” The Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

Management’s discussion and analysis of financial condition and results of operations is intended to help provide an understanding of the Company’s financial condition, changes in financial condition and results of operations. This discussion is organized as follows:

•Overview of the Company’s Businesses—This section provides a general description of the Company’s businesses, as well as developments that occurred to date during fiscal ~~2021~~2022 that the Company believes are important in understanding its results of operations and financial condition or to disclose known trends.

~~Table of Contents~~

•Results of Operations—This section provides an analysis of the Company’s results of operations for the three and ~~nine~~six months ended ~~March~~December 31, 2021 and 2020. This analysis is presented on both a consolidated basis and a segment basis. Supplemental revenue information is also included for reporting units within certain segments and is presented on a gross basis, before eliminations in consolidation. In addition, a brief description is provided of significant transactions and events that impact the comparability of the results being analyzed.

•Liquidity and Capital Resources—This section provides an analysis of the Company’s cash flows for the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020, as well as a discussion of the Company’s financial arrangements and outstanding commitments, both firm and contingent, that existed as of ~~March~~December 31, 2021.

OVERVIEW OF THE COMPANY’S BUSINESSES

The Company manages and reports its businesses in the following six segments:

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Exchange (“ASX”) (ASX: REA). REA Group advertises property and property-related services on its websites and mobile apps, ~~across Australia, India and Asia,~~ including Australia’s leading residential, commercial and share property websites, realestate.com.au, realcommercial.com.au and Flatmates.com.au, and property portals in ~~India and Asia.~~India. In addition, REA Group provides property-related data to the financial sector and financial services through an end-to-end digital property search and financing experience and a mortgage broking offering.

•Subscription Video Services—The Company’s Subscription Video Services segment provides ~~video~~ sports, entertainment and news services to pay-TV and streaming subscribers and other commercial licensees, primarily via cable, satellite and internet distribution, and consists of (i) the Company’s 65% interest in the Foxtel Group (with the remaining 35% interest ~~in Foxtel~~ held by Telstra, an ASX-listed telecommunications company) and (ii) Australian News Channel (“ANC”). The Foxtel Group is the largest ~~pay-TV~~Australian-based subscription television provider, ~~in Australia,~~ with nearly 200 channels covering sports, general entertainment, movies, documentaries, music, children’s programming and news. Foxtel ~~offers~~and the Kayo Sports streaming service offer the leading sports programming content in Australia, with broadcast rights to live sporting events including: National Rugby League, Australian Football League, Cricket Australia ~~the domestic football league~~ and various motorsports programming. The Foxtel Group also operates BINGE, its on-demand entertainment streaming service, and Foxtel Now, ~~an over-the-top, or OTT,~~a streaming service that provides access across ~~Foxtel's~~Foxtel’s live and on-demand ~~content, Kayo, its sports OTT service, and Binge, its recently~~content. In October 2021, the Foxtel Group launched ~~on-demand entertainment OTT~~Flash, a news aggregation streaming service.

•Book Publishing—The Book Publishing segment consists of HarperCollins, the second largest consumer book publisher in the world, with operations in 17 countries and particular strengths in general fiction, nonfiction, children’s and religious publishing. HarperCollins owns more than 120 branded publishing imprints, including Harper, William Morrow, HarperCollins Children’s Books, Avon, Harlequin and Christian publishers Zondervan and Thomas Nelson, and publishes works by well-known authors such as Harper Lee, ~~Chip and Joanna Gaines, David Walliams, Angie Thomas, Sarah Young and~~George Orwell, Agatha Christie and ~~popular titles such~~Zora Neale Hurston, as ~~The Hobbit, Goodnight Moon, To Kill~~well as global author brands including J.R.R. Tolkien, C.S. Lewis, Daniel Silva, Karin Slaughter and Dr. Martin Luther King, Jr. It is also home to many beloved children’s books and authors and a ~~Mockingbird, Jesus Calling~~ significant Christian publishing business.~~and~~ ~~The Hate U Give~~.

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•Other—The Other segment consists primarily of general corporate overhead expenses, ~~the corporate Strategy Group,~~ costs related to the U.K. Newspaper Matters (as defined in Note 10—Commitments and Contingencies to the Consolidated Financial Statements) and transformation costs associated with the Company’s ~~global shared services program.~~ongoing cost reduction initiatives.

Other Business Developments

~~COVID-19 Impact and Second Half Trends~~

~~The ongoing impact of COVID-19 and measures~~Agreement to prevent its spread have continued to create significant economic volatility, uncertainty and disruption and have affected the Company’s businesses in a number of ways. In the Other segment, the Company expects costs in the fourth quarter to increase by approximately $20 million compared to the prior year, primarily as a result of higher employee costs due to the absence of bonus reductions related to COVID-19 and stock price performance, as well as ongoing investment spending as the Company ramps up the global shared services initiative. Except as discussed above, the effects on the Company’s businesses and the expected trends for the remainder of fiscal 2021 remain consistent with those discussed in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2020. For information regarding risks related to COVID-19, please see “The ongoing novel coronavirus (COVID-19) pandemic and other similar epidemics, pandemics or widespread health crises could have a material adverse effect on the Company’s business, results of operations, cash flows and financial position~~.” in Part I, Item 1A. of the 2020 Form 10-K.~~

~~Acquisition of Investor’s Business Daily~~acquire Base Chemicals

In ~~May~~December 2021, the Company ~~acquired Investor’s Business Daily~~entered into an agreement to acquire the Base Chemicals business (“~~IBD”~~Base Chemicals”) from ~~O’Neil Capital Management~~S&P Global Inc. (“S&P”) and IHS Markit Ltd. (“IHS”) for ~~$275~~$295 million in ~~cash. IBD is a digital-first financial news~~cash, subject to customary purchase price

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adjustments. Base Chemicals provides pricing data, insights, analysis and ~~research business with unique investor tools, research~~forecasting for key base chemicals through its leading Market Advisory and ~~analysis products, including the investors.com website.~~World Analysis services. The acquisition ~~expands~~will complement the Company’s planned acquisition of OPIS (as defined below) and enable Dow ~~Jones’s offerings with the addition of proprietary data~~Jones to further expand into new customer segments and ~~tools~~bolster its plans to ~~help professional~~create a new energy, chemicals and ~~retail investors identify top-performing stocks. IBD~~renewables vertical to deliver valuable and trusted specialized content. Base Chemicals will be ~~operated by~~a subsidiary of Dow Jones, and its results will be included in the Dow Jones segment. The acquisition is subject to customary closing conditions, including regulatory approvals and the consummation of the S&P and IHS merger. Closing is expected in the second half of fiscal 2022.

~~Senior Notes Offering~~Share Repurchase Program

~~In April~~On September 22, 2021, the Company ~~issued~~announced a new stock repurchase program authorizing the Company to purchase up to $1 billion in the aggregate of ~~senior notes due 2029~~its outstanding Class A Common Stock and Class B Common Stock (the ~~“2021 Senior Notes”~~“Repurchase Program”). The Repurchase Program replaces the Company’s $500 million Class A Common Stock repurchase program approved by the Company’s Board of Directors (the “Board of Directors”) in May 2013. The manner, timing, number and share price of any repurchases will be determined by the Company at its discretion and will depend upon such factors as the market price of the stock, general market conditions, applicable securities laws, alternative investment opportunities and other factors. The Repurchase Program has no time limit and may be modified, suspended or discontinued at any time. See Note 7—Equity in the accompanying Consolidated Financial Statements.

REA Group sale of Malaysia and Thailand businesses

In August 2021, ~~Senior Notes will bear~~REA Group acquired an 18% interest at(16.6% on a ~~fixed rate~~diluted basis) in PropertyGuru Pte. Ltd. (“PropertyGuru”), a leading digital property technology company operating marketplaces in Southeast Asia, in exchange for all shares of ~~3.875% per annum, payable~~REA Group’s entities in ~~cash semi-annually~~Malaysia and Thailand. The transaction was completed after REA Group entered into an agreement to sell its 27% interest in its existing venture with 99.co. The transaction created a leading digital real estate services company in Southeast Asia and new opportunities for collaboration and access to a deeper pool of expertise, technology and investment in the region. REA Group received one seat on ~~May 15 and November 15~~the board of ~~each year, commencing November 15, 2021. The notes will mature on May 15, 2029. The Company plans to use~~directors of PropertyGuru as part of the ~~net proceeds from the offering for general corporate purposes, which may include acquisitions and working capital.~~transaction.

Agreement to acquire ~~HMH Books & Media~~OPIS

In ~~March~~July 2021, the Company entered into an agreement to acquire the Oil Price Information Service business and related assets (“OPIS”) from S&P and IHS for $1.15 billion in cash, subject to customary purchase price adjustments. OPIS is a global industry standard for benchmark and reference pricing and news and analytics for the oil, natural gas liquids and biofuels industries. The business also provides pricing and news and analytics for the coal, mining and metals end markets and insights and analytics in renewables and carbon pricing. The acquisition will enable Dow Jones to become a leading provider of energy and renewables information and further its goal of building the leading global business news and information platform for professionals. OPIS will be a subsidiary of Dow Jones, and its results will be included in the Dow Jones segment. The acquisition is subject to customary closing conditions, including regulatory approvals and the consummation of the S&P and IHS merger. Closing is expected in the second half of fiscal 2022.

Acquisition of Mortgage Choice

Acquisition of HMH Books & Media

In May 2021, the Company acquired the Books & Media segment of Houghton Mifflin Harcourt (“HMH Books & Media”) for $349 million in cash. HMH Books & Media publishes renowned and awarded children’s, young adult, fiction, non-fiction, culinary and reference titles. The acquisition ~~will add~~adds an extensive and successful backlist, a strong frontlist in the lifestyle and children’s segments and a productions business that ~~will provide new~~provides opportunities to expand HarperCollins’s intellectual property across ~~multiple~~different formats. HMH Books & Media ~~will be~~is a subsidiary of HarperCollins and its results ~~will be~~are included in the Book Publishing segment. ~~The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to close in the fourth quarter of fiscal 2021.~~

~~REA Group agreement to acquire Mortgage Choice~~

In March 2021, REA Group entered into an agreement to acquire Mortgage Choice Limited (“Mortgage Choice”) for approximately A$244 million in cash (approximately $186.5 million based on exchange rates as of the date of the announcement), to be funded by an increase in REA Group’s syndicated debt facilities. Mortgage Choice is a leading Australian mortgage broking business, and the acquisition is expected to complement REA Group’s existing Smartline broker footprint and accelerate REA Group’s financial services strategy to establish a leading mortgage broking business with national scale. Mortgage Choice will be a subsidiary of REA Group and its results will be included in the Digital Real Estate Services segment. The acquisition is subject to customary closing conditions, including Mortgage Choice shareholder, court and

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~~regulatory approvals and receipt~~Acquisition of ~~an independent expert opinion that the transaction is in the best interests of Mortgage Choice shareholders, and is expected to close in the fourth quarter of fiscal 2021.~~

~~Google partnership~~Investor’s Business Daily

In ~~February~~May 2021, the Company entered into a multi-year partnership with Google to provide content from its news sites around the world. The three-year agreement also includes the development of a subscription platform, the sharing of advertising revenue via Google’s advertising technology services, the cultivation of audio journalism and meaningful investments in video journalism by YouTube.

~~Avail~~

~~In December 2020, the Company~~ acquired ~~Rentalutions, Inc.~~Investor’s Business Daily (“~~Avail”~~IBD”) for ~~initial cash consideration of approximately $36 million, net of $4 million of cash acquired, and up to $8~~$275 million in ~~future cash consideration based upon the achievement of certain performance objectives over the next three years. Avail~~cash. IBD is a ~~platform that improves~~digital-first financial news and research business with unique investing content, analytical products and educational resources, including the ~~renting experience for do-it-yourself landlords and tenants with online tools, educational content and world-class support.~~Investors.com website. The acquisition ~~helps realtor.com~~® ~~further expand into~~expands Dow Jones’s offerings with the ~~rental space, extend its support for landlords, augment current rental listing content, grow its audience~~addition of proprietary data and ~~build brand affinity~~tools to help professional and ~~long-term relationships with renters. Avail~~retail investors identify top-performing stocks. IBD is ~~a subsidiary of Move,~~operated by Dow Jones, and its results are included within the ~~Digital Real Estate Services~~Dow Jones segment. ~~Refer to Note 3—Acquisitions to the Consolidated Financial Statements for further discussion.~~

~~Elara~~

In December 2020, the Company acquired a controlling interest in Elara Technologies Pte. Ltd. (“Elara”) through a subscription for newly-issued preference shares and the buyout of certain minority shareholders. The total aggregate purchase price associated with the acquisition at the completion date is $138 million which consists of $69 million of cash, the fair value of noncontrolling interests of $37 million and the fair value of the Company’s previously held equity interest in Elara of $22 million. As a result of the transactions, REA Group’s shareholding in Elara increased from 13.5% to 59.7%, while News Corporation’s shareholding increased from 22.1% to 39.0%. During the three months ended March 31, 2021, REA Group acquired an additional 0.8% interest in Elara. REA Group and News Corporation now hold a combined eight of nine Elara board seats, and the Company began consolidating Elara in December 2020. The acquisition of Elara allows REA Group to be at the forefront of long-term growth opportunities within India and the digitization of the real estate sector. Elara is a subsidiary of REA Group, and its results are included within the Digital Real Estate Services segment. As a result of the transactions, the Company’s ownership in REA Group was diluted by 0.2% to 61.4%. Refer to Note 3—Acquisitions to the Consolidated Financial Statements for further discussion.

~~Regional and community newspapers in Australia~~

During the fourth quarter of fiscal 2020, the Company decommissioned the print operations for its regional and community newspapers in Australia. These initiatives will result in a revenue decrease at News Corp Australia of approximately $111 million and have an immaterial impact on Segment EBITDA during fiscal 2021.

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RESULTS OF OPERATIONS

Results of Operations—For the three and ~~nine~~six months ended ~~March~~December 31, 2021 versus the three and ~~nine~~six months ended ~~March~~December 31, 2020

The following table sets forth the Company’s operating results for the three and ~~nine~~six months ended ~~March~~December 31, 2021 as compared to the three and ~~nine~~six months ended ~~March~~December 31, 2020.


		For the three months ended March 31,								For the nine months ended March 31,									For the three months ended December 31,								For the six months ended December 31,
		2021		2020		Change		% Change		2021		2020		Change		% Change			2021		2020		Change		% Change		2021		2020		Change		% Change
(in millions, except %)	(in millions, except %)					Better/(Worse)								Better/(Worse)				(in millions, except %)					Better/(Worse)								Better/(Worse)
Revenues:	Revenues:																	Revenues:
Circulation and subscription	Circulation and subscription	$	1,076	$	966	$	110	11	%	$	3,108	$	2,951	$	157	5	%	Circulation and subscription	$	1,072	$	1,030	$	42	4	%	$	2,149	$	2,032	$	117	6	%
Advertising	Advertising	374		576		(202)		(35)	%	1,154		1,861		(707)		(38)	%	Advertising	519		448		71		16	%	924		780		144		18	%
Consumer	Consumer	472		396		76		19	%	1,436		1,204		232		19	%	Consumer	594		523		71		14	%	1,118		964		154		16	%
Real estate	Real estate	291		209		82		39	%	807		669		138		21	%	Real estate	352		281		71		25	%	672		516		156		30	%
Other	Other	122		119		3		3	%	361		400		(39)		(10)	%	Other	180		132		48		36	%	356		239		117		49	%
Total Revenues	Total Revenues	2,335		2,266		69		3	%	6,866		7,085		(219)		(3)	%	Total Revenues	2,717		2,414		303		13	%	5,219		4,531		688		15	%
Operating expenses	Operating expenses	(1,186)		(1,283)		97		8	%	(3,548)		(3,972)		424		11	%	Operating expenses	(1,279)		(1,198)		(81)		(7)	%	(2,523)		(2,362)		(161)		(7)	%
Selling, general and administrative	Selling, general and administrative	(851)		(741)		(110)		(15)	%	(2,255)		(2,295)		40		2	%	Selling, general and administrative	(852)		(719)		(133)		(18)	%	(1,700)		(1,404)		(296)		(21)	%
Depreciation and amortization	Depreciation and amortization	(173)		(160)		(13)		(8)	%	(504)		(484)		(20)		(4)	%	Depreciation and amortization	(168)		(167)		(1)		(1)	%	(333)		(331)		(2)		(1)	%
Impairment and restructuring charges	Impairment and restructuring charges	(30)		(1,125)		1,095		97	%	(93)		(1,451)		1,358		94	%	Impairment and restructuring charges	(23)		(23)		—		—	%	(45)		(63)		18		29	%
Equity losses of affiliates	Equity losses of affiliates	(5)		(7)		2		29	%	(9)		(12)		3		25	%	Equity losses of affiliates	(6)		(3)		(3)		(100)	%	(6)		(4)		(2)		(50)	%
Interest expense, net	Interest expense, net	(12)		(9)		(3)		(33)	%	(32)		(13)		(19)		**		Interest expense, net	(21)		(12)		(9)		(75)	%	(43)		(20)		(23)		**
Other, net	Other, net	61		13		48		**		132		19		113		**		Other, net	(7)		54		(61)		**		130		71		59		83	%
Income (loss) before income tax (expense) benefit		139		(1,046)		1,185		**		557		(1,123)		1,680		**
Income tax (expense) benefit		(43)		10		(53)		**		(153)		(21)		(132)		**
Net income (loss)		96		(1,036)		1,132		**		404		(1,144)		1,548		**
Less: Net (income) loss attributable to noncontrolling interests		(17)		306		(323)		**		(60)		272		(332)		**
Net income (loss) attributable to News Corporation stockholders		$	79	$	(730)	$	809	**		$	344	$	(872)	$	1,216	**
Income before income tax expense																		Income before income tax expense	361		346		15		4	%	699		418		281		67
Income tax expense																		Income tax expense	(99)		(85)		(14)		(16)	%	(170)		(110)		(60)		(55)	%
Net income																		Net income	262		261		1		—	%	529		308		221		72	%
Less: Net income attributable to noncontrolling interests																		Less: Net income attributable to noncontrolling interests	(27)		(30)		3		10	%	(98)		(43)		(55)		**
Net income attributable to News Corporation stockholders																		Net income attributable to News Corporation stockholders	$	235	$	231	$	4	2	%	$	431	$	265	$	166	63	%

** not meaningful

Revenues— Revenues increased ~~$69~~$303 million, or 3%13%, and ~~decreased $219~~$688 million, or 3%15%, for the three and ~~nine~~six months ended ~~March~~December 31, 2021, respectively, as compared to the corresponding periods of fiscal ~~2020.~~2021.

The revenue increase for the three months ended ~~March~~December 31, 2021 was ~~primarily~~ driven by ~~the increase in revenues~~increases at the Digital Real Estate Services segment primarily due to higher real estate revenues and the acquisition of Mortgage Choice, at the Book Publishing ~~Subscription Video Services~~segment primarily due to the acquisition of HMH Books and ~~Dow Jones segments, partially offset by the decline in revenues~~Media, at the News Media segment primarily ~~driven by~~due to higher advertising and circulation and subscription revenues and at the ~~$199 million impact from~~Dow Jones segment primarily due to higher advertising revenues, higher circulation and subscription revenues and the ~~sale~~acquisition of ~~News America Marketing in the fourth quarter of fiscal 2020 and lower print advertising revenues.~~IBD. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of ~~$176~~$6 million, or 8%1%, for the three months ended ~~March~~December 31, 2021 as compared to the corresponding period of fiscal ~~2020.~~2021.

The revenue ~~decrease~~increase for the ~~nine~~six months ended ~~March~~December 31, 2021 was ~~primarily~~ driven by increases at the ~~$590 million impact from~~Digital Real Estate Services segment primarily due to higher real estate revenues and the ~~sale~~acquisition of ~~News America Marketing in~~Mortgage Choice, at the ~~fourth quarter~~Book Publishing segment primarily due to the acquisition of ~~fiscal 2020~~HMH Books and ~~lower print advertising revenue in~~Media, at the News Media segment ~~partially offset by the increase in~~primarily due to higher advertising and

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circulation and subscription revenues and at the ~~Book Publishing, Digital Real Estate Services, Subscription Video Services and~~ Dow Jones ~~segments.~~segment primarily due to higher advertising revenues, higher circulation and subscription revenues and the acquisition of IBD. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of ~~$301~~$63 million, or 4%1%, for the ~~nine~~six months ended ~~March~~December 31, 2021 as compared to the corresponding period of fiscal ~~2020.~~2021.

The Company calculates the impact of foreign currency fluctuations for businesses reporting in currencies other than the U.S. dollar by multiplying the results for each quarter in the current period by the difference between the average exchange rate for that quarter and the average exchange rate in effect during the corresponding quarter of the prior year and totaling the impact for all quarters in the current period.

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Operating expenses— Operating expenses ~~decreased $97~~increased $81 million, or 8%7%, and ~~$424~~$161 million, or ~~11%~~7%, for the three and ~~nine~~six months ended ~~March~~December 31, 2021, respectively, as compared to the corresponding periods of fiscal ~~2020.~~2021.

The ~~decrease~~increase in operating expenses for the three months ended ~~March~~December 31, 2021 was primarily driven by the sale of News America Marketing in the fourth quarter of fiscal 2020, cost savings at Foxtel primarily driven by renegotiated sports rights fees, lower newsprint, production and distribution costs at the News Media and Dow Jones segments and lower costs relating to the closure or transition to digital of certain regional and community newspapers in Australia, partially offset by the negative impact of foreign currency fluctuations and higher expenses at the Book Publishing segment due to the acquisition of HMH Books and Media, higher ~~revenue.~~costs related to increased sales volumes and the mix of titles and increased manufacturing and freight costs exacerbated by supply chain pressures. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in an Operating expense increase of ~~$85~~$3 million ~~or 6%,~~ for the three months ended ~~March~~December 31, 2021 as compared to the corresponding period of fiscal ~~2020.~~2021.

The ~~decrease~~increase in operating expenses for the ~~nine~~six months ended ~~March~~December 31, 2021 was primarily driven by the sale of News America Marketing in the fourth quarter of fiscal 2020, lower newsprint, production and distribution costs at the News Media and Dow Jones segments, cost savings at Foxtel primarily driven by renegotiated sports rights fees and lower costs relating to the closure or transition to digital of certain regional and community newspapers in Australia, partially offset by the negative impact of foreign currency fluctuations, higher expenses at the Book Publishing segment due to the acquisition of HMH Books and Media, higher ~~revenue~~costs related to increased sales volumes and the mix of titles and increased manufacturing and freight costs exacerbated by supply chain pressures, at the News Media segment driven by the $15 million negative impact of foreign currency fluctuations and at the Digital Real Estate Services segment due to higher employee costs at Move. The Company has generally observed an increasingly competitive labor market which has led to higher compensation and hiring costs for attracting and retaining highly qualified employees across its businesses and is expected to impact the Company’s cost base in the near term. The increased expenses were partially offset by lower expenses at the Subscription Video Services segment, primarily due to the absence of ~~the $22~~$56 million ~~one-time benefit from the settlement~~ of ~~certain warranty-related claims~~additional sports programming rights and production costs recognized in the ~~U.K.~~prior year that were deferred from fiscal 2020 due to the coronavirus pandemic (“COVID-19”), which was partially offset by increased sports programming rights costs due to the timing of noncomparable events in ~~fiscal 2020.~~the current year. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in an Operating expense increase of ~~$147~~$30 million, or 3%1%, for the ~~nine~~six months ended ~~March~~December 31, 2021 as compared to the corresponding period of fiscal ~~2020.~~2021.

Selling, general and administrative— Selling, general and administrative increased ~~$110~~$133 million, or ~~15%~~18%, and ~~decreased $40~~$296 million, or 2%21%, for the three and ~~nine~~six months ended ~~March~~December 31, 2021, respectively, as compared to the corresponding periods of fiscal ~~2020.~~2021.

The increase in selling, general and administrative for the three months ended ~~March~~December 31, 2021 was primarily driven by increased expenses at the ~~negative impact~~Digital Real Estate Services segment due to the acquisitions of ~~foreign currency fluctuations~~Mortgage Choice and Elara (which was rebranded to REA India), higher employee costs ~~primarily in the Other segment largely related to stock price performance, as well as investment spending as the Company ramps up the global shared services initiative, partially offset~~at both Move and REA Group and increased marketing expense at Move. The increase was also driven by the ~~impact from~~Dow Jones segment due to the ~~sale~~acquisition of IBD and higher professional services fees, by increased marketing and technology costs at the Subscription Video Services segment, by higher costs at the News ~~America Marketing in~~Media segment due to increased revenues and by the ~~fourth quarter~~acquisition of ~~fiscal 2020.~~HMH Books and Media. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a Selling, general and administrative increase of ~~$59~~$2 million ~~or 8%,~~ for the three months ended ~~March~~December 31, 2021 as compared to the corresponding period of fiscal ~~2020.~~2021.

The ~~decrease~~increase in selling, general and administrative for the ~~nine~~six months ended ~~March~~December 31, 2021 was primarily driven by increased expenses at the ~~sale~~Digital Real Estate Services segment due to the acquisitions of ~~News America Marketing in the fourth quarter of fiscal 2020, cost savings initiatives across the businesses~~Mortgage Choice and ~~the impact from the sale of Unruly in the third quarter of fiscal 2020, partially offset~~REA India, higher employee costs at both Move and REA Group and increased marketing expense at Move. The increase was also driven by the ~~negative~~Dow Jones segment due to the acquisition of IBD, higher professional services fees and increased employee costs, by higher costs at the News Media segment due to the adverse $10 million impact of foreign currency fluctuations and ~~higher employee~~increased revenues, by increased marketing and technology costs ~~primarily in~~at the ~~Other~~Subscription Video Services segment ~~largely related to stock price performance, as well as investment spending as~~and by the ~~Company ramps up the global shared services initiative.~~acquisition of HMH Books and Media. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a Selling, general and administrative increase of ~~$96~~$21 million, or 4%1%, for the ~~nine~~six months ended ~~March~~December 31, 2021 as compared to the corresponding period of fiscal ~~2020.~~2021.

Depreciation and amortization— Depreciation and amortization expense increased ~~$13~~$1 million, or 8%1%, and ~~$20~~$2 million, or 4%1%, for the three and ~~nine~~six months ended ~~March~~December 31, 2021, respectively, as compared to the corresponding periods of fiscal ~~2020, primarily due to the~~2021.

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The impact of foreign currency fluctuations of the U.S. dollar against local currencies ~~which~~ resulted in a depreciation and amortization expense increase of ~~$17~~nil and $3 million, or ~~11%, and $28 million, or 6%~~1%, for the three and ~~nine~~six months ended ~~March~~December 31, 2021, respectively, as compared to the corresponding periods of fiscal ~~2020.~~2021.

Impairment and restructuring charges— During the three and six months ended March 31, 2020, the Company recognized non-cash impairment charges of $1,106 million, primarily related to a $931 million write-down of goodwill and indefinite-lived intangible assets at its Foxtel reporting unit and $175 million related to the reclassification of its News America Marketing reporting unit to assets held for sale.

During the nine months ended March 31, 2020, the Company recognized non-cash impairment charges of $1,398 million, primarily related to a $931 million write-down of goodwill and indefinite-lived intangible assets at its Foxtel reporting unit, $175 million related to the reclassification of its News America Marketing reporting unit to assets held for sale, as well as $292 million of write-downs primarily related to News America Marketing recognized in the first half of fiscal 2020.

~~During the three and nine months ended March~~December 31, 2021, the Company recorded restructuring charges of ~~$30~~$23 million and ~~$93~~$45 million, respectively. During the three and ~~nine~~six months ended ~~March~~December 31, 2020, the Company recorded restructuring charges of

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~~$19~~ $23 million and ~~$53~~$63 million, respectively. See Note 4—Restructuring Programs in the accompanying Consolidated Financial Statements.

Equity losses of affiliates— Equity losses of affiliates ~~decreased~~increased by $2$3 million and $3$2 million for the three and ~~nine~~six months ended ~~March~~December 31, 2021, respectively, as compared to the corresponding periods of fiscal ~~2020.~~2021. See Note 5—Investments in the accompanying Consolidated Financial Statements.

Interest expense, net— Interest expense, net increased by $3$9 million and ~~$19~~$23 million for the three and ~~nine~~six months ended ~~March~~December 31, 2021, respectively, as compared to the corresponding periods of fiscal ~~2020. The increase~~2021, primarily driven by the issuance of $1 billion of senior notes in the ~~nine months ended March 31, 2021 was primarily due to the absence of the impact from the settlement of cash flow hedges related to debt maturities in the first~~fourth quarter of fiscal ~~2020.~~2021 (the “2021 Senior Notes”).

Other, net— Other, net decreased by $61 million and increased by ~~$48 million and $113~~$59 million for the three and ~~nine~~six months ended ~~March~~December 31, 2021, respectively, as compared to the corresponding periods of fiscal ~~2020.~~2021. See Note 13—Additional Financial Information in the accompanying Consolidated Financial Statements.

Income tax ~~(expense) benefit~~expense— For the three months ended ~~March~~December 31, 2021, the Company recorded income tax expense of ~~$43~~$99 million on pre-tax income of ~~$139~~$361 million, resulting in an effective tax rate that was higher than the U.S. statutory tax rate. The ~~higher~~ tax rate was ~~primarily due to valuation allowances being recorded against tax benefits in certain foreign jurisdictions with operating losses and the impact of~~impacted by foreign operations which are subject to higher tax ~~rates.~~rates and by changes in valuation allowances.

For the ~~nine~~six months ended ~~March~~December 31, 2021, the Company recorded income tax expense of ~~$153~~$170 million on pre-tax income of ~~$557~~$699 million, resulting in an effective tax rate that was higher than the U.S. statutory tax rate. The tax rate was impacted by foreign operations which are subject to higher tax rates and changes in valuation allowances, offset by the lower tax impact related to the acquisition of an 18% interest in PropertyGuru.

For the three months ended December 31, 2020, the Company recorded income tax expense of $85 million on pre-tax income of $346 million, resulting in an effective tax rate that was higher than the U.S. statutory tax rate. The higher tax rate was primarily due to valuation allowances being recorded against tax benefits in certain foreign jurisdictions with operating losses and the impact of foreign operations which are subject to higher tax rates, offset by a remeasurement of deferred taxes in the U.K.

For the ~~three~~six months ended ~~March~~December 31, 2020, the Company recorded an income tax ~~benefit~~expense of ~~$10~~$110 million on a pre-tax ~~loss~~income of ~~$1,046~~$418 million, resulting in an effective tax rate that was ~~lower~~higher than the U.S. statutory tax rate. The higher tax rate was ~~impacted by the non-cash impairment of Foxtel’s goodwill and indefinite-lived intangible assets, which had no tax benefit, by~~primarily due to valuation allowances being recorded against tax benefits in certain foreign jurisdictions with operating losses and by the impact of foreign operations which are subject to higher tax ~~rates.~~

~~For~~rates, offset by a remeasurement of deferred taxes in the nine months ended March 31, 2020, the Company recorded income tax expense of $21 million on a pre-tax loss of $1,123 million, resulting in an effective tax rate that was lower than the U.S. statutory tax rate. The tax rate was impacted by the non-cash impairment of Foxtel’s goodwill and indefinite-lived intangible assets, which had no tax benefit, a lower tax benefit recorded on the impairment of News America Marketing’s goodwill in prior quarters, by valuation allowances being recorded against tax benefits in certain foreign jurisdictions with operating losses, and by the impact of foreign operations which are subject to higher tax rates.U.K.

The changing and volatile macro-economic conditions connected with COVID-19 may cause fluctuations in forecasted earnings before income taxes. As such, the Company’s effective tax rate could be subject to volatility as forecasted earnings before income taxes are impacted by events which are highly uncertain and cannot be predicted.

Net income ~~(loss)~~— Net income for the three and ~~nine~~six months ended ~~March~~December 31, 2021 was ~~$96~~$262 million and ~~$404~~$529 million, respectively, compared to a net ~~loss~~income of ~~$1,036~~$261 million and ~~$1,144~~$308 million for the corresponding periods of fiscal ~~2020.~~2021.

Net income ~~(loss)~~ for the three ~~and nine~~ months ended ~~March~~December 31, 2021 ~~improved~~increased by ~~$1,132~~$1 million ~~and $1,548 million, respectively,~~as compared to the corresponding period of fiscal 2021, primarily driven by higher Total Segment EBITDA, largely offset by lower Other, net, higher tax expense and higher interest expense.

Net income for the ~~absence~~six months ended December 31, 2021 increased by $221 million as compared to the corresponding period of ~~the non-cash impairment charges discussed above,~~fiscal 2021, primarily driven by higher Total Segment EBITDA and higher Other, net, partially offset by higher tax ~~expense.~~

~~Net (income) loss attributable to noncontrolling interests— Net (income) loss attributable to noncontrolling interests improved by $323 million~~expense and ~~$332 million for the three and nine months ended March 31, 2021, respectively, as compared to the~~higher interest expense.

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Net income attributable to noncontrolling interests— Net income attributable to noncontrolling interests decreased by $3 million, or 10%, and increased by $55 million for the three and six months ended December 31, 2021, respectively, as compared to the corresponding periods of fiscal ~~2020,~~2021. The increase for the six months ended December 31, 2021 was primarily driven by ~~the absence of the non-cash impairment charges recognized at the Company’s Foxtel reporting unit in fiscal 2020, as well as~~ increased earnings at REA ~~Group.~~Group, which included the $107 million gain from the disposition of its entities in Malaysia and Thailand.

Segment Analysis

Segment EBITDA is the primary measure used by the Company’s chief operating decision maker to evaluate the performance of, and allocate resources within, the Company’s businesses. Segment EBITDA provides management, investors and equity analysts with a measure to analyze the operating performance of each of the Company’s business segments and its enterprise value against historical data and competitors’ data, although historical results may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences).

Total Segment EBITDA is a non-GAAP measure and should be considered in addition to, not as a substitute for, net income (loss), cash flow and other measures of financial performance reported in accordance with GAAP. In addition, this measure does not reflect cash available to fund requirements and excludes items, such as depreciation and amortization and impairment and restructuring charges, which are significant components in assessing the Company’s financial performance. The Company believes that the presentation of Total Segment EBITDA provides useful information regarding the Company’s operations and other factors that affect the Company’s reported results. Specifically, the Company believes that by excluding certain one-time or non-cash items such as impairment and restructuring charges and depreciation and amortization, as well as potential distortions between periods caused by factors such as financing and capital structures and changes in tax positions or regimes, the Company provides users of its consolidated financial statements with insight into both its core operations as well as the factors that affect reported results between periods but which the Company believes are not representative of its core business. As a result, users of the Company’s consolidated financial statements are better able to evaluate changes in the core operating results of the Company across different periods.

The following table reconciles Net income ~~(loss)~~ to Total Segment EBITDA for the three and ~~nine~~six months ended ~~March~~December 31, 2021 and 2020:


		For the three months ended March 31,				For the nine months ended March 31,					For the three months ended December 31,				For the six months ended December 31,
		2021		2020		2021		2020			2021		2020		2021		2020
(in millions)	(in millions)									(in millions)
Net income (loss)		$	96	$	(1,036)	$	404	$	(1,144)
Net income										Net income	$	262	$	261	$	529	$	308
Add:	Add:									Add:
Income tax expense (benefit)		43		(10)		153		21
Income tax expense										Income tax expense	99		85		170		110
Other, net	Other, net	(61)		(13)		(132)		(19)		Other, net	7		(54)		(130)		(71)
Interest expense, net	Interest expense, net	12		9		32		13		Interest expense, net	21		12		43		20
Equity losses of affiliates	Equity losses of affiliates	5		7		9		12		Equity losses of affiliates	6		3		6		4
Impairment and restructuring charges	Impairment and restructuring charges	30		1,125		93		1,451		Impairment and restructuring charges	23		23		45		63
Depreciation and amortization	Depreciation and amortization	173		160		504		484		Depreciation and amortization	168		167		333		331
Total Segment EBITDA	Total Segment EBITDA	$	298	$	242	$	1,063	$	818	Total Segment EBITDA	$	586	$	497	$	996	$	765

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The following tables set forth the Company’s Revenues and Segment EBITDA by reportable segment for the three and ~~nine~~six months ended ~~March~~December 31, 2021 and 2020:

For the three months ended March 31,
2021 2020
(in millions) Revenues Segment
EBITDA Revenues Segment
EBITDA
Digital Real Estate Services $ 351 $ 117 $ 261 $ 74
Subscription Video Services 523 91 462 68
Dow Jones 421 82 397 51
Book Publishing 490 80 412 55
News Media 550 8 733 24
Other — (80) 1 (30)
Total $ 2,335 $ 298 $ 2,266 $ 242

For the nine months ended March 31,
2021 2020
(in millions) Revenues Segment
EBITDA Revenues Segment
EBITDA
Digital Real Estate Services $ 980 $ 378 $ 827 $ 274
Subscription Video Services 1,530 293 1,477 219
Dow Jones 1,253 263 1,209 176
Book Publishing 1,492 255 1,259 167
News Media 1,610 52 2,311 97
Other 1 (178) 2 (115)
Total $ 6,866 $ 1,063 $ 7,085 $ 818


	For the three months ended December 31,
	2021				2020
(in millions)	Revenues		Segment EBITDA		Revenues		Segment EBITDA
Digital Real Estate Services	$	456	$	178	$	339	$	142
Subscription Video Services	498		86		511		124
Dow Jones	508		144		446		109
Book Publishing	617		107		544		104
News Media	638		111		573		66
Other	—		(40)		1		(48)
Total	$	2,717	$	586	$	2,414	$	497


	For the six months ended December 31,
	2021				2020
(in millions)	Revenues		Segment EBITDA		Revenues		Segment EBITDA
Digital Real Estate Services	$	882	$	316	$	629	$	261
Subscription Video Services	1,008		200		1,007		202
Dow Jones	952		239		832		181
Book Publishing	1,163		192		1,002		175
News Media	1,214		145		1,060		44
Other	—		(96)		1		(98)
Total	$	5,219	$	996	$	4,531	$	765

Digital Real Estate Services ~~(14%~~(17% and ~~12%~~14% of the Company’s consolidated revenues in the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020, respectively)


		For the three months ended March 31,								For the nine months ended March 31,									For the three months ended December 31,								For the six months ended December 31,
		2021		2020		Change		% Change		2021		2020		Change		% Change			2021		2020		Change		% Change		2021		2020		Change		% Change
(in millions, except %)	(in millions, except %)					Better/(Worse)								Better/(Worse)				(in millions, except %)					Better/(Worse)								Better/(Worse)
Revenues:	Revenues:																	Revenues:
Circulation and subscription	Circulation and subscription	$	6	$	9	$	(3)	(33)	%	$	22	$	28	$	(6)	(21)	%	Circulation and subscription	$	3	$	8	$	(5)	(63)	%	$	6	$	16	$	(10)	(63)	%
Advertising	Advertising	31		25		6		24	%	89		77		12		16	%	Advertising	33		30		3		10	%	66		58		8		14	%
Real estate	Real estate	291		209		82		39	%	807		669		138		21	%	Real estate	352		281		71		25	%	672		516		156		30	%
Other	Other	23		18		5		28	%	62		53		9		17	%	Other	68		20		48		**		138		39		99		**
Total Revenues	Total Revenues	351		261		90		34	%	980		827		153		19	%	Total Revenues	456		339		117		35	%	882		629		253		40	%
Operating expenses	Operating expenses	(46)		(44)		(2)		(5)	%	(134)		(131)		(3)		(2)	%	Operating expenses	(51)		(45)		(6)		(13)	%	(107)		(88)		(19)		(22)	%
Selling, general and administrative	Selling, general and administrative	(188)		(143)		(45)		(31)	%	(468)		(422)		(46)		(11)	%	Selling, general and administrative	(227)		(152)		(75)		(49)	%	(459)		(280)		(179)		(64)	%
Segment EBITDA	Segment EBITDA	$	117	$	74	$	43	58	%	$	378	$	274	$	104	38	%	Segment EBITDA	$	178	$	142	$	36	25	%	$	316	$	261	$	55	21	%
** not meaningful																		** not meaningful

For the three months ended ~~March~~December 31, 2021, revenues at the Digital Real Estate Services segment increased ~~$90~~$117 million, or ~~34%~~35%, as compared to the corresponding period of fiscal ~~2020.~~2021. At REA Group, revenues increased ~~$46~~$103 million, or ~~32%~~56%, to ~~$189~~$287 million for the three months ended ~~March~~December 31, 2021 from ~~$143~~$184 million in the corresponding period of fiscal ~~2020,~~2021, primarily due to the ~~$28~~$41 million ~~positive impact~~contribution from the acquisition of ~~foreign currency fluctuations,~~Mortgage Choice in the fourth quarter of fiscal 2021, an increase in Australian residential depth revenue driven by price increases and strong national listings and the $7$10 million impact from the acquisition of ~~Elara.~~REA India. Revenues at Move increased ~~$44~~$14 million, or ~~37%~~9%, to ~~$162~~$169 million for the three months ended ~~March~~December 31, 2021 from ~~$118~~$155 million in the corresponding period of fiscal ~~2020,~~2021, primarily driven by higher real estate revenues. The traditional lead generation product ~~and referral model both~~ benefited from higher ~~lead volumes.~~contribution from Market VIP, a hybrid product offering, and increased yield. The referral model benefited from higher average home values and referral fees, partially offset by lower transaction volume, and generated approximately 32% of total Move revenues. These increases were partially offset

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by the $4 million impact from the sale of Top Producer in the third quarter of fiscal 2021. Lead volumes declined 9% for the three months ended December 31, 2021 as compared to the corresponding period of fiscal 2021.

For the three months ended December 31, 2021, Segment EBITDA at the Digital Real Estate Services segment increased $36 million, or 25%, as compared to the corresponding period of fiscal 2021, primarily driven by the $37 million higher contribution from REA Group mainly driven by the higher revenues discussed above, partially offset by higher employee costs at both Move and REA Group, $6 million of higher marketing costs at Move and the $3 million negative impact from the acquisition of REA India.

For the six months ended December 31, 2021, revenues at the Digital Real Estate Services segment increased $253 million, or 40%, as compared to the corresponding period of fiscal 2021. Revenues at REA Group increased $197 million, or 59%, to $533 million for the six months ended December 31, 2021 from $336 million in the corresponding period of fiscal 2021, primarily due to the $84 million contribution from the acquisition of Mortgage Choice in the fourth quarter of fiscal 2021, an increase in Australian residential depth revenue driven by higher national listings and price increases, an $18 million increase from the acquisition of REA India in the second quarter of fiscal 2021 and the $7 million positive impact of foreign currency fluctuations. Revenues at Move increased $56 million, or 19%, to $349 million for the six months ended December 31, 2021 from $293 million in the corresponding period of fiscal 2021, primarily driven by higher real estate revenues. The traditional lead generation product ~~continued to see a strong increase in demand~~benefited from ~~agents, driving improvements in sell-through and~~increased yield. The referral model ~~also~~ benefited from higher average home values and transaction volume and generated approximately ~~25%~~32% of total Move revenues.

~~Table~~ These increases were partially offset by the $9 million impact from the sale of ~~Contents~~

Top Producer in the third quarter of fiscal 2021. Lead volumes declined 14% for the six months ended December 31, 2021 as compared to the corresponding period of fiscal 2021.

For the ~~three~~six months ended ~~March~~December 31, 2021, Segment EBITDA at the Digital Real Estate Services segment increased ~~$43~~$55 million, or ~~58%~~21%, as compared to the corresponding period of fiscal ~~2020,~~2021. The increase was primarily driven by the ~~$36~~$62 million higher contribution from ~~Move resulting~~REA Group, including a $3 million contribution from the acquisition of Mortgage Choice, mainly driven by the higher revenues discussed above and the ~~$14~~$3 million positive impact of foreign currency fluctuations, partially offset by higher employee costs at ~~both~~ Move and REA Group, $25 million of higher marketing costs at Move and the $6$9 million negative impact from the acquisition of ~~Elara.~~REA India.

Subscription Video Services (19% and 22% of the Company’s consolidated revenues in the six months ended December 31, 2021 and 2020, respectively)


	For the three months ended December 31,								For the six months ended December 31,
	2021		2020		Change		% Change		2021		2020		Change		% Change
(in millions, except %)					Better/(Worse)								Better/(Worse)
Revenues:
Circulation and subscription	$	433	$	446	$	(13)	(3)	%	$	873	$	883	$	(10)	(1)	%
Advertising	55		55		—		—	%	114		105		9		9	%
Other	10		10		—		—	%	21		19		2		11	%
Total Revenues	498		511		(13)		(3)	%	1,008		1,007		1		—	%
Operating expenses	(312)		(305)		(7)		(2)	%	(621)		(638)		17		3	%
Selling, general and administrative	(100)		(82)		(18)		(22)	%	(187)		(167)		(20)		(12)	%
Segment EBITDA	$	86	$	124	$	(38)	(31)	%	$	200	$	202	$	(2)	(1)	%

For the ~~nine~~three months ended ~~March~~December 31, 2021, revenues at the ~~Digital Real Estate~~Subscription Video Services segment ~~increased $153~~decreased $13 million, or ~~19%~~3%, as compared to the corresponding period of fiscal ~~2020. Revenues at Move increased $93 million, or 26%, to $455 million for the nine months ended March 31,~~ 2021, from $362 million in the corresponding period of fiscal 2020, primarily driven by higher real estate revenues. The referral model and the traditional lead generation product both benefited from higher lead and transaction volumes. The referral model also benefited from higher average home values and generated approximately 30% of total Move revenues. The traditional lead generation product saw continued strong demand from agents, driving improvements in sell-through and yield. At REA Group, revenues increased $60 million, or 13%, to $525 million for the nine months ended March 31, 2021 from $465 million in the corresponding period of fiscal 2020, primarily due to ~~the $46 million positive impact of foreign currency fluctuations, an increase in Australian~~lower residential ~~depth revenue driven by strong national listings~~subscription revenues resulting from fewer residential broadcast subscribers and the $7$4 million ~~impact from the acquisition of Elara,~~decline in commercial subscription revenues due to recent COVID-19 related restrictions within certain states in Australia, partially offset by the ~~continued decline~~$23 million increase in ~~the Asian market~~streaming revenues, primarily from Kayo and ~~commercial~~BINGE. Foxtel Group streaming subscription revenues ~~due to COVID-19 restrictions.~~represented approximately 19% of total circulation and subscription revenues for three months ended December 31, 2021.

For the ~~nine~~three months ended ~~March~~December 31, 2021, Segment EBITDA ~~at the Digital Real Estate Services segment increased $104~~decreased $38 million, or ~~38%~~31%, as compared to the corresponding period of fiscal ~~2020,~~2021, primarily ~~driven~~due to higher investment spending on streaming products, mainly in marketing, higher technology costs and the lower revenues discussed above. Segment EBITDA was also impacted by higher sports programming rights costs due to the ~~$83~~timing of noncomparable events, mainly motorsports and cricket, as the $20 million ~~higher contribution from Move resulting~~of additional sports programming rights and production costs recognized in the prior year period related to deferrals from the ~~higher revenues discussed above and the $24 million positive impact~~fourth quarter of ~~foreign currency fluctuations, partially~~fiscal 2020 due to COVID-19 were offset by ~~higher employee~~lower costs ~~at both Move and REA Group and~~from renegotiated sports rights.

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For the ~~$10 million negative impact from the acquisition of Elara.~~

~~Subscription Video Services~~ ~~(22% and 21% of the Company’s consolidated revenues in the nine~~six months ended ~~March 31, 2021 and 2020, respectively)~~

For the three months ended March 31, For the nine months ended March 31,
2021 2020 Change % Change 2021 2020 Change % Change
(in millions, except %) Better/(Worse) Better/(Worse)
Revenues:
Circulation and subscription $ 469 $ 414 $ 55 13 % $ 1,352 $ 1,304 $ 48 4 %
Advertising 46 40 6 15 % 151 144 7 5 %
Other 8 8 — — % 27 29 (2) (7) %
Total Revenues 523 462 61 13 % 1,530 1,477 53 4 %
Operating expenses (333) (312) (21) (7) % (971) (997) 26 3 %
Selling, general and administrative (99) (82) (17) (21) % (266) (261) (5) (2) %
Segment EBITDA $ 91 $ 68 $ 23 34 % $ 293 $ 219 $ 74 34 %

~~For the three months ended March~~December 31, 2021, revenues at the Subscription Video Services segment increased ~~$61~~$1 million ~~or 13%,~~ as compared to the corresponding period of fiscal ~~2020,~~2021, as the $52 million increase in streaming revenues, primarily ~~due to~~from Kayo and BINGE, the positive impact of foreign currency fluctuations and ~~$23 million of~~ higher advertising revenues ~~from Kayo and Binge, partially~~were offset by lower residential subscription revenues resulting from fewer residential broadcast subscribers and the $7$8 million decline in commercial subscription revenues ~~primarily from lower occupancy at hotels~~ due to ~~ongoing national travel~~recent COVID-19 related restrictions ~~related to COVID-19.~~within certain states in Australia. Foxtel Group streaming subscription revenues represented approximately 19% of total circulation and subscription revenues for six months ended December 31, 2021. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of ~~$79~~$16 million, or ~~17%~~1%, for the ~~three~~six months ended ~~March~~December 31, 2021 as compared to the corresponding period of fiscal ~~2020.~~2021.

For the ~~three~~six months ended ~~March~~December 31, 2021, Segment EBITDA ~~increased $23~~decreased $2 million, or ~~34%~~1%, as compared to the corresponding period of fiscal ~~2020,~~2021, primarily due to ~~$22~~higher investment spending on streaming products, mainly in marketing, higher technology costs and higher sports programming rights costs in the current period due to the timing of noncomparable events, mainly motorsports and cricket, partially offset by the absence of $56 million of ~~lower~~additional sports programming rights and production costs ~~which was primarily driven by savings from renegotiated sports rights,~~recognized in the ~~$14 million positive impact of foreign currency fluctuations and lower transmission, marketing and employee costs, partially offset by the increased investment in OTT products.~~

~~For the nine months ended March 31, 2021, revenues at the Subscription Video Services segment increased $53 million, or 4%, as compared to the corresponding~~prior year period of fiscal 2020, primarily due to the positive impact of foreign currency fluctuations and $50 million of higher revenues from Kayo and Binge. The increase in revenues was partially offset by lower subscription revenues resulting from fewer residential broadcast subscribers and the $32 million decline in commercial subscription

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revenues from restrictions impacting pubs, clubs and other commercial venues, including lower occupancy at hotels due to ongoing national travel restrictions, related to COVID-19. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of $132 million, or 9%, for the nine months ended March 31, 2021 as compared to the corresponding period of fiscal 2020.

For the nine months ended March 31, 2021, Segment EBITDA increased $74 million, or 34%, as compared to the corresponding period of fiscal 2020, primarily due to $49 million of lower sports programming rights and production costs, as savings from renegotiated sports rights more than offset the recognition of $57 million of sports programming rights and production coststhat were deferred from the fourth quarter of fiscal 2020. The increase was also driven by lower entertainment programming, transmission, employee and marketing costs and the $26 million positive impact of foreign currency fluctuations, partially offset by the increased investment in OTT products.2020 due to COVID-19.

The following tables provide information regarding certain key performance indicators for the Foxtel Group, the primary reporting unit within the Subscription Video Services segment, as of and for the three and ~~nine~~six months ended ~~March~~December 31, 2021 and 2020 (see the Company’s ~~2020~~2021 Form 10-K for further detail regarding these performance indicators):

As of March 31,
2021 2020
(in 000's)
Broadcast Subscribers
Residential(a)
1,711 1,942
Commercial(b)
235 266
OTT Subscribers (Total (Paid))
Foxtel Now(c)
238 (228 paid) 338 (317 paid)
Kayo(d)
914 (851 paid) 444 (408 paid)
Binge(e)
679 (516 paid) —
Total Paid Subscribers 3,541 2,933


	As of December 31,
	2021	2020
	(in 000's)
Broadcast Subscribers
Residential(a)	1,564	1,783
Commercial(b)	218	218
Streaming Subscribers (Total (Paid))(c)
Kayo	1,031 (1,013 paid)	648 (624 paid)
BINGE	1,037 (928 paid)	468 (431 paid)
Foxtel Now	219 (211 paid)	265 (258 paid)


Total Subscribers (Total (Paid))(d)	4,075 (3,937 paid)	3,382 (3,314 paid)


		For the three months ended March 31,		For the nine months ended March 31,			For the three months ended December 31,		For the six months ended December 31,
		2021	2020	2021	2020		2021	2020	2021	2020
Broadcast ARPU~~(f)~~(e)	Broadcast ARPU~~(f)~~(e)	A$80 (US$62)	A$79 (US$52)	A$80 (US$59)	A$78 (US$53)	Broadcast ARPU~~(f)~~(e)	A$82 (US$60)	A$80 (US$58)	A$82 (US$60)	A$79 (US$57)
Broadcast Subscriber Churn~~(g)~~(f)	Broadcast Subscriber Churn~~(g)~~(f)	20.1%	17.5%	17.3%	16.0%	Broadcast Subscriber Churn~~(g)~~(f)	13.0%	17.5%	13.5%	16.0%

(a) Subscribing households throughout Australia as of ~~March~~December 31, 2021 and 2020.

(b) Commercial subscribers throughout Australia as of ~~March~~December 31, 2021 and 2020. Commercial subscribers are calculated as residential equivalent business units and are derived by dividing total recurring revenue from these subscribers by an estimated average Broadcast ARPU which is held constant through the year.

(c) Total and Paid ~~Foxtel Now~~ subscribers for the applicable streaming service as of ~~March~~December 31, 2021 and 2020. Paid ~~Foxtel Now~~ subscribers excludes customers receiving service for no charge under certain new subscriber promotions.

(d) Total subscribers consists of Foxtel’s broadcast and ~~Paid Kayo subscribers~~streaming services listed above, and, as of ~~March~~December 31, 2021, ~~and 2020. Paid Kayo subscribers excludes customers receiving service for no charge under certain new subscriber promotions.~~

~~(e) Total and Paid Binge subscribers as of March 31, 2021.~~Flash~~Binge was launched on May 25, 2020. Paid Binge subscribers excludes customers receiving service for no charge under certain new subscriber promotions.~~.

~~(f)~~(e) Average monthly broadcast residential subscription revenue per user (excluding Optus) (Broadcast ARPU) for the three and ~~nine~~six months ended ~~March~~December 31, 2021 and 2020.

~~(g)~~(f) Broadcast residential subscriber churn rate (excluding Optus) (Broadcast Subscriber Churn) for the three and ~~nine~~six months ended ~~March~~December 31, 2021 and 2020. Broadcast subscriber churn represents the number of cable and satellite residential subscribers whose service is disconnected, expressed as a percentage of the average total number of cable and satellite residential subscribers, presented on an annual basis.

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Dow Jones (18% ~~and 17%~~ of the Company’s consolidated revenues in both the ~~nine~~six months ended ~~March~~December 31, 2021 and ~~2020, respectively)~~2020)


		For the three months ended March 31,								For the nine months ended March 31,									For the three months ended December 31,								For the six months ended December 31,
		2021		2020		Change		% Change		2021		2020		Change		% Change			2021		2020		Change		% Change		2021		2020		Change		% Change
(in millions, except %)	(in millions, except %)					Better/(Worse)								Better/(Worse)				(in millions, except %)					Better/(Worse)								Better/(Worse)
Revenues:	Revenues:																	Revenues:
Circulation and subscription	Circulation and subscription	$	329	$	303	$	26	9	%	$	959	$	888	$	71	8	%	Circulation and subscription	$	356	$	319	$	37	12	%	$	705	$	630	$	75	12	%
Advertising	Advertising	85		84		1		1	%	270		288		(18)		(6)	%	Advertising	141		115		26		23	%	231		185		46		25	%
Other	Other	7		10		(3)		(30)	%	24		33		(9)		(27)	%	Other	11		12		(1)		(8)	%	16		17		(1)		(6)	%
Total Revenues	Total Revenues	421		397		24		6	%	1,253		1,209		44		4	%	Total Revenues	508		446		62		14	%	952		832		120		14	%
Operating expenses	Operating expenses	(187)		(195)		8		4	%	(571)		(578)		7		1	%	Operating expenses	(196)		(199)		3		2	%	(392)		(384)		(8)		(2)	%
Selling, general and administrative	Selling, general and administrative	(152)		(151)		(1)		(1)	%	(419)		(455)		36		8	%	Selling, general and administrative	(168)		(138)		(30)		(22)	%	(321)		(267)		(54)		(20)	%
Segment EBITDA	Segment EBITDA	$	82	$	51	$	31	61	%	$	263	$	176	$	87	49	%	Segment EBITDA	$	144	$	109	$	35	32	%	$	239	$	181	$	58	32	%

For the three months ended ~~March~~December 31, 2021, revenues at the Dow Jones segment increased ~~$24~~$62 million, or 6%14%, as compared to the corresponding period of fiscal ~~2020,~~2021, primarily driven by anhigher advertising revenues, the increase in circulation and subscription revenues and ~~digital advertising revenues, partially offset by a decline in print advertising revenues.~~the $18 million impact from the acquisition of IBD. Digital revenues at the Dow Jones segment represented ~~74%~~72% of total revenues for the three months ended ~~March~~December 31, 2021, as compared to ~~68%~~70% in the corresponding period of fiscal ~~2020.~~2021. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue decrease of $1 million for the three months ended December 31, 2021 as compared to the corresponding period of fiscal 2021.

For the six months ended December 31, 2021, revenues at the Dow Jones segment increased $120 million, or 14%, as compared to the corresponding period of fiscal 2021, primarily driven by higher advertising revenues, the increase in circulation and subscription revenues and the $38 million impact from the acquisition of IBD. Digital revenues at the Dow Jones segment represented 73% of total revenues for the six months ended December 31, 2021, as compared to 71% in the corresponding period of fiscal 2021. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of $4$1 million for the ~~three~~six months ended ~~March~~December 31, 2021 as compared to the corresponding period of fiscal ~~2020.~~2021.

~~For~~Circulation and subscription revenues


	For the three months ended December 31,								For the six months ended December 31,
	2021		2020		Change		% Change		2021		2020		Change		% Change
(in millions, except %)					Better/(Worse)								Better/(Worse)
Circulation and subscription revenues:
Circulation and other	$	228	$	202	$	26	13	%	$	449	$	400	$	49	12	%
Professional information business	128		117		11		9	%	256		230		26		11	%
Total circulation and subscription revenues	$	356	$	319	$	37	12	%	$	705	$	630	$	75	12	%

Circulation and subscription revenues increased $37 million, or 12%, during the ~~nine~~three months ended March 31, 2021, revenues at the Dow Jones segment increased $44 million, or 4%, as compared to the corresponding period of fiscal 2020, driven by an increase in circulation and subscription and digital advertising revenues, partially offset by a decline in print advertising revenues. Digital revenues at the Dow Jones segment represented 72% of total revenues for the nine months ended March 31, 2021, as compared to 66% in the corresponding period of fiscal 2020. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of $8 million for the nine months ended MarchDecember 31, 2021 as compared to the corresponding period of fiscal ~~2020.~~

2021. Circulation and ~~subscription revenues~~

For the three months ended March 31, For the nine months ended March 31,
2021 2020 Change % Change 2021 2020 Change % Change
(in millions, except %) Better/(Worse) Better/(Worse)
Circulation and subscription revenues:
Circulation and other $ 204 $ 188 $ 16 9 % $ 604 $ 549 $ 55 10 %
Professional information business 125 115 10 9 % 355 339 16 5 %
Total circulation and subscription revenues $ 329 $ 303 $ 26 9 % $ 959 $ 888 $ 71 8 %

~~Circulation and subscription~~other revenues increased $26 million, or ~~9%, during the three months ended March 31, 2021 as compared to the corresponding period of fiscal 2020. Circulation and other revenues increased $16 million, or 9%~~13%, primarily driven by the $16 million impact from the acquisition of IBD in the fourth quarter of fiscal 2021 and growth in digital-only subscriptions at The Wall Street Journal,~~partially offset by print volume declines.During the three months ended March 31, 2021, average daily digital-only subscriptions at~~ ~~The Wall Street Journal~~ ~~reached 2.6 million, a 29% increase as compared to the corresponding period of fiscal 2020,~~ and ~~digital~~Barron’s Group. Digital revenues represented ~~64%~~67% of circulation revenue for the three months ended ~~March~~December 31, 2021, as compared to ~~58%~~63% in the corresponding period of fiscal ~~2020.~~2021. Professional information business revenues increased ~~$10~~$11 million, or 9%, primarily driven by ~~the growth~~an increase of $8 million in Risk & Compliance revenues.

Circulation and subscription revenues increased ~~$71~~$75 million, or 8%12%, during the ~~nine~~six months ended ~~March~~December 31, 2021 as compared to the corresponding period of fiscal ~~2020.~~2021. Circulation and other revenues increased ~~$55~~$49 million, or ~~10%~~12%, primarily driven by the $34 million impact from the acquisition of IBD in the fourth quarter of fiscal 2021 and growth in digital-only subscriptions at The Wall Street Journal and ~~a $13 million increase in content licensing revenues,partially offset by print volume declines.~~Barron’s Group. Digital revenues represented ~~63%~~67% of circulation revenue for the ~~nine~~six months ended ~~March~~December 31, 2021, as compared to ~~57%~~63% in the corresponding period of fiscal ~~2020.~~2021. Professional information business revenues increased ~~$16~~$26 million, or 5%11%, ~~as growth~~primarily driven by an increase of ~~$24~~$19 million in Risk & Compliance ~~revenues was partially offset by lower revenues from other professional information business products.~~revenues.

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The following table summarizes average daily consumer subscriptions during the three months ended ~~March~~December 31, 2021 and 2020 for select publications and for all consumer subscription products.(a)~~(b)~~


		For the three months ended March 31,						For the three months ended December 31(b),
		2021	2020	Change	% Change			2021	2020	Change	% Change
(in thousands, except %)	(in thousands, except %)			Better/(Worse)			(in thousands, except %)			Better/(Worse)
The Wall Street Journal	The Wall Street Journal						The Wall Street Journal
Digital-only subscriptions(c)	Digital-only subscriptions(c)	2,625	2,041	584	29	%	Digital-only subscriptions(c)	2,918	2,462	456	19	%
Total subscriptions	Total subscriptions	3,382	2,805	577	21	%	Total subscriptions	3,618	3,224	394	12	%
Barron’s
Barron’s Group(d)							Barron’s Group(d)
Digital-only subscriptions(c)	Digital-only subscriptions(c)	535	413	122	30	%	Digital-only subscriptions(c)	757	599	158	26	%
Total subscriptions	Total subscriptions	745	667	78	12	%	Total subscriptions	963	809	154	19	%
Total Consumer~~(d)~~(e)	Total Consumer~~(d)~~(e)						Total Consumer~~(d)~~(e)
Digital-only subscriptions(c)	Digital-only subscriptions(c)	3,299	2,559	740	29	%	Digital-only subscriptions(c)	3,774	3,061	713	23	%
Total subscriptions	Total subscriptions	4,269	3,581	688	19	%	Total subscriptions	4,707	4,033	674	17	%

________________________

(a)Based on internal data for the periods from September 27, 2021 through December 26, 2021 and September 28, 2020 through ~~March 28, 2021 and~~ December ~~30, 2019 through March 29,~~27, 2020, respectively, with independent ~~assurance~~verification procedures over global total sales and subscriptions provided by PricewaterhouseCoopers LLP UK.

(b)Subscriptions include individual consumer subscriptions, as well as subscriptions purchased by companies, schools, businesses and associations for use by their respective employees, students, customers or members. Subscriptions exclude single-copy sales and copies purchased by hotels, airlines and other businesses for limited distribution or access to customers.

(c)For some publications, including The Wall Street Journal and Barron’s, Dow Jones sells bundled print and digital products. For bundles that provide access to both print and digital products every day of the week, only one unit is reported each day and is designated as a print subscription. For bundled products that provide access to the print product only on specified days and full digital access, one print subscription is reported for each day that a print copy is served and one digital subscription is reported for each remaining day of the week.

(d)Barron’s Group consists of Barron’s, MarketWatch, Financial News and Private Equity News.

(e)Total Consumer consists of The Wall Street Journal, Barron’s Group~~Barron’s, MarketWatch~~ and, ~~Financial News, including~~ ~~Private Equity News~~.for the three months ended December 31, 2021, Investor’s Business Daily.

Advertising revenues

Advertising revenues increased $1$26 million, or 1%23%, during the three months ended ~~March~~December 31, 2021 as compared to the corresponding period of fiscal ~~2020,~~2021, primarily driven by the $14 million increase in print advertising revenues due to the ongoing recovery from COVID-19 and the $12 million increase in digital advertising revenues ~~largely offset~~driven by ~~the $11 million decrease in print advertising revenues resulting from general market weakness and lower print volume across~~ ~~The Wall Street Journal~~ ~~and~~ ~~Barron’s~~ ~~due to COVID-19.~~higher yield. Digital advertising ~~revenue~~ represented ~~61%~~56% of advertising revenue for the three months ended ~~March~~December 31, 2021, as compared to ~~48%~~58% in the corresponding period of fiscal ~~2020.~~2021.

Advertising revenues ~~decreased $18~~increased $46 million, or 6%25%, during the ~~nine~~six months ended ~~March~~December 31, 2021 as compared to the corresponding period of fiscal ~~2020, primarily~~2021. Digital advertising revenues increased by $27 million, driven by higher yield, and represented 58% of advertising revenue in both the ~~$50~~six months ended December 31, 2021 and 2020. The increase in advertising revenues was also due to the $19 million ~~decrease~~increase in print advertising revenues ~~resulting~~driven by the ongoing recovery from ~~general market weakness and lower print volume across~~ ~~The Wall Street Journal~~ ~~and~~ ~~Barron’s~~ ~~due to~~ COVID-19. The decreases were partially offset by a $32 million increase in digital advertising revenue, which represented 59% of advertising revenue for the nine months ended March 31, 2021, as compared to 44% in the corresponding period of fiscal 2020.

Segment EBITDA

For the three months ended ~~March~~December 31, 2021, Segment EBITDA at the Dow Jones segment increased ~~$31~~$35 million, or ~~61%~~32%, as compared to the corresponding period of fiscal ~~2020,~~2021, including a $4 million contribution from the acquisition of IBD, primarily due to the increase in revenues discussed above, ~~lower newsprint, production and distribution costs driven by lower print volumes and other discretionary cost savings,~~ partially offset by ~~increased employee costs.~~higher professional services fees.

For the ~~nine~~six months ended ~~March~~December 31, 2021, Segment EBITDA at the Dow Jones segment increased ~~$87~~$58 million, or ~~49%~~32%, as compared to the corresponding period of fiscal ~~2020,~~2021, including a $10 million contribution from the acquisition of IBD, primarily due to the increase in revenues discussed above, ~~lower newsprint, production and distribution costs driven by lower print volumes and other discretionary cost savings,~~ partially offset by higher professional services fees and increased employee costs.

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Book Publishing (22% ~~and 17%~~ of the Company’s consolidated revenues in both the ~~nine~~six months ended ~~March~~December 31, 2021 and ~~2020, respectively)~~2020)


		For the three months ended March 31,								For the nine months ended March 31,									For the three months ended December 31,								For the six months ended December 31,
		2021		2020		Change		% Change		2021		2020		Change		% Change			2021		2020		Change		% Change		2021		2020		Change		% Change
(in millions, except %)	(in millions, except %)					Better/(Worse)								Better/(Worse)				(in millions, except %)					Better/(Worse)								Better/(Worse)
Revenues:	Revenues:																	Revenues:
Consumer	Consumer	$	472	$	396	$	76	19	%	$	1,436	$	1,204	$	232	19	%	Consumer	$	594	$	523	$	71	14	%	$	1,118	$	964	$	154	16	%
Other	Other	18		16		2		13	%	56		55		1		2	%	Other	23		21		2		10	%	45		38		7		18	%
Total Revenues	Total Revenues	490		412		78		19	%	1,492		1,259		233		19	%	Total Revenues	617		544		73		13	%	1,163		1,002		161		16	%
Operating expenses	Operating expenses	(309)		(276)		(33)		(12)	%	(960)		(852)		(108)		(13)	%	Operating expenses	(411)		(347)		(64)		(18)	%	(778)		(651)		(127)		(20)	%
Selling, general and administrative	Selling, general and administrative	(101)		(81)		(20)		(25)	%	(277)		(240)		(37)		(15)	%	Selling, general and administrative	(99)		(93)		(6)		(6)	%	(193)		(176)		(17)		(10)	%
Segment EBITDA	Segment EBITDA	$	80	$	55	$	25	45	%	$	255	$	167	$	88	53	%	Segment EBITDA	$	107	$	104	$	3	3	%	$	192	$	175	$	17	10	%

For the three months ended ~~March~~December 31, 2021, revenues at the Book Publishing segment increased ~~$78~~$73 million, or ~~19%~~13%, as compared to the corresponding period of fiscal ~~2020,~~2021, primarily driven by the ~~strong performance of the~~ ~~Bridgerton~~ ~~series by Julia Quinn and other backlist titles in the General Books and children’s categories, the release of~~ ~~Just as I Am~~ ~~by Cicely Tyson, as well as the $8~~$50 million ~~impact~~contribution from the acquisition of ~~a book publisher in Europe~~HMH Books and Media in the fourth quarter of fiscal ~~2020.~~2021 and higher revenues in the General Books category, which benefited from the releases of Twelve and a Half by Gary Vaynerchuk, The Pioneer Woman Cooks: Super Easy! by Ree Drummond and The Storyteller by Dave Grohl. The increase was also driven by increased book sales in the U.K. and increased Christian Publishing sales driven by the ongoing recovery of certain distribution channels from COVID-19, partially offset by lower Children’s Group sales. Digital sales increased by ~~38%~~8% as compared to the corresponding period of fiscal ~~2020~~2021 due to growth in ~~both e-books and~~ downloadable audiobooks. Digital sales represented approximately ~~26%~~17% of consumer revenues during the three months ended ~~March~~December 31, 2021. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of ~~$10~~$1 million ~~or 2%,~~ for the three months ended ~~March~~December 31, 2021 as compared to the corresponding period of fiscal ~~2020.~~2021.

For the three months ended ~~March~~December 31, 2021, Segment EBITDA at the Book Publishing segment increased ~~$25~~$3 million, or ~~45%~~3%, as compared to the corresponding period of fiscal ~~2020,~~2021, including a $10 million contribution from the acquisition of HMH Books and Media, primarily due to the higher revenues discussed above, partially offset by higher costs related to increased sales ~~volume~~volumes and ~~higher employee costs.~~the mix of titles and increased manufacturing and freight costs exacerbated by supply chain pressures. These supply chain pressures are expected to continue to impact the business in the near term.

For the ~~nine~~six months ended ~~March~~December 31, 2021, revenues at the Book Publishing segment increased ~~$233~~$161 million, or ~~19%~~16%, as compared to the corresponding period of fiscal ~~2020,~~2021, primarily driven by the ~~strong performance of the~~ ~~Bridgerton~~ ~~series by Julia Quinn and other backlist titles in the General Books and children’s categories, the strong performance of~~ ~~The Guest List~~ ~~by Lucy Foley,~~ ~~The Order~~ ~~by Daniel Silva,~~ ~~The Happy In A Hurry Cookbook~~ ~~by Steve Doocey, and~~ ~~Didn’t See That Coming~~ ~~by Rachel Hollis, as well as the $30~~$100 million ~~impact~~contribution from the acquisition of ~~a book publisher in Europe~~HMH Books and Media in the fourth quarter of fiscal ~~2020.~~2021, higher revenues in the General Books category, which benefited from the releases of Twelve and a Half by Gary Vaynerchuk, The Pioneer Woman Cooks: Super Easy! by Ree Drummond and The Storyteller by Dave Grohl, increased book sales in the U.K. and increased Christian Publishing sales driven by the ongoing recovery of certain distribution channels from COVID-19. Digital sales increased by ~~25%~~6% as compared to the corresponding period of fiscal ~~2020~~2021 due to growth in both ~~e-books~~downloadable audiobooks and ~~downloadable audiobooks.~~e-books. Digital sales represented approximately ~~22%~~19% of consumer revenues during the ~~nine~~six months ended ~~March~~December 31, 2021. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of ~~$19~~$8 million, or 2%1%, for the ~~nine~~six months ended ~~March~~December 31, 2021 as compared to the corresponding period of fiscal ~~2020.~~2021.

For the ~~nine~~six months ended ~~March~~December 31, 2021, Segment EBITDA at the Book Publishing segment increased ~~$88~~$17 million, or ~~53%~~10%, as compared to the corresponding period of fiscal ~~2020,~~2021, including a $16 million contribution from the acquisition of HMH Books and Media, primarily due to the higher revenues discussed above, partially offset by higher costs related to increased sales ~~volume~~volumes and ~~higher employee costs.~~the mix of titles and increased manufacturing and freight costs exacerbated by supply chain pressures.

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News Media (24% ~~and 33%~~ of the Company’s consolidated revenues in both the ~~nine~~six months ended ~~March~~December 31, 2021 and ~~2020, respectively)~~2020)


		For the three months ended March 31,								For the nine months ended March 31,									For the three months ended December 31,								For the six months ended December 31,
		2021		2020		Change		% Change		2021		2020		Change		% Change			2021		2020		Change		% Change		2021		2020		Change		% Change
(in millions, except %)	(in millions, except %)					Better/(Worse)								Better/(Worse)				(in millions, except %)					Better/(Worse)								Better/(Worse)
Revenues:	Revenues:																	Revenues:
Circulation and subscription	Circulation and subscription	$	272	$	240	$	32	13	%	$	775	$	730	$	45	6	%	Circulation and subscription	$	280	$	257	$	23	9	%	$	565	$	503	$	62	12	%
Advertising	Advertising	212		427		(215)		(50)	%	644		1,352		(708)		(52)	%	Advertising	290		248		42		17	%	513		432		81		19	%
Other	Other	66		66		—		—	%	191		229		(38)		(17)	%	Other	68		68		—		—	%	136		125		11		9	%
Total Revenues	Total Revenues	550		733		(183)		(25)	%	1,610		2,311		(701)		(30)	%	Total Revenues	638		573		65		11	%	1,214		1,060		154		15	%
Operating expenses	Operating expenses	(311)		(456)		145		32	%	(912)		(1,414)		502		36	%	Operating expenses	(309)		(302)		(7)		(2)	%	(625)		(601)		(24)		(4)	%
Selling, general and administrative	Selling, general and administrative	(231)		(253)		22		9	%	(646)		(800)		154		19	%	Selling, general and administrative	(218)		(205)		(13)		(6)	%	(444)		(415)		(29)		(7)	%
Segment EBITDA	Segment EBITDA	$	8	$	24	$	(16)	(67)	%	$	52	$	97	$	(45)	(46)	%	Segment EBITDA	$	111	$	66	$	45	68	%	$	145	$	44	$	101	**

** not meaningful																		** not meaningful

Revenues at the News Media segment ~~decreased $183~~increased $65 million, or ~~25%~~11%, for the three months ended ~~March~~December 31, 2021 as compared to the corresponding period of fiscal 2020, primarily due to lower advertising revenues of $215 million, driven by the sale of News America Marketing in the fourth quarter of fiscal 2020, which contributed $199 million to the decline, continued weakness in the print advertising market exacerbated by COVID-19 and the $23 million impact from the closure or transition to digital of regional and community newspapers in Australia, partially offset by the $22 million positive impact of foreign currency fluctuations and digital advertising growth at the ~~New York Post. Circulation and subscription~~2021. Advertising revenues increased ~~$32~~$42 million as compared to the corresponding period of fiscal ~~2020~~2021, driven by digital advertising growth across key mastheads and print advertising growth, primarily at News UK. Circulation and subscription revenues increased $23 million as compared to the corresponding period of fiscal 2021, primarily due to higher content licensing revenues, mainly at News Corp Australia, digital subscriber growth across key mastheads and cover price increases, partially offset by print volume declines. The impact of foreign currency fluctuations of the ~~$26~~U.S. dollar against local currencies resulted in a revenue increase of $6 million, or 1%, for the three months ended December 31, 2021 as compared to the corresponding period of fiscal 2021.

Segment EBITDA at the News Media segment improved by $45 million, or 68%, for the three months ended December 31, 2021 as compared to the corresponding period of fiscal 2021, primarily due to higher contributions from News Corp Australia of $35 million and News UK of $6 million mainly driven by the higher revenues described above, as well as increased contributions from the New York Post and Wireless Group, partially offset by costs associated with News UK’s TV project.

Revenues at the News Media segment increased $154 million, or 15%, for the six months ended December 31, 2021 as compared to the corresponding period of fiscal 2021. Advertising revenues increased $81 million as compared to the corresponding period of fiscal 2021, driven by digital advertising growth across key mastheads, print advertising growth at News UK, the $11 million positive impact of foreign currency fluctuations and higher revenues at Wireless Group. Circulation and subscription revenues increased $62 million as compared to the corresponding period of fiscal 2021, driven by higher content licensing revenues, primarily at News Corp Australia, digital subscriber growth across key mastheads, the $16 million positive impact of foreign currency fluctuations and cover price increases, partially offset by ~~declines in~~ print volume declines. Other revenues for the six months ended December 31, 2021 increased $11 million as compared to the corresponding period of fiscal 2021, primarily driven by increased revenues at News Corp Australia, partially offset by lower revenues at News UK. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of ~~$55~~$31 million, or 7%3%, for the ~~three~~six months ended ~~March~~December 31, 2021 as compared to the corresponding period of fiscal ~~2020.~~2021.

Segment EBITDA at the News Media segment ~~declined $16~~improved by $101 million ~~or 67%,~~ for the ~~three~~six months ended ~~March~~December 31, 2021 as compared to the corresponding period of fiscal ~~2020,~~2021, primarily due to ~~the $24 million impact from the sale of News America Marketing in the fourth quarter of fiscal 2020 and the $7 million lower contribution~~higher contributions from News Corp Australia ~~partially offset~~of $61 million and News UK of $33 million mainly driven by the higher ~~contribution~~revenues described above, as well as increased contributions from ~~News UK of $12 million driven by cost savings initiatives~~Wireless Group and ~~lower newsprint, production and distribution costs and a $4 million higher contribution from~~ the New York Post., partially offset by costs associated with News UK’s TV project.

News Corp Australia

Revenues atwere $288 million for the ~~News Media segment decreased $701~~three months ended December 31, 2021, an increase of $36 million, or ~~30%~~14%, ~~for the nine months ended March 31, 2021 as~~ compared to revenues of $252 million in the corresponding period of fiscal ~~2020,~~2021. Circulation and subscription revenues increased $14 million, primarily driven by higher content licensing revenues and digital subscriber growth. Advertising revenues increased $13 million, primarily due to ~~lower~~higher digital advertising revenues ~~of $708 million,~~ driven by ~~the sale of News America Marketing in the fourth quarter of fiscal 2020, which contributed $590 million to the decline, continued weakness in the print advertising market exacerbated by COVID-19~~improved yields, higher impressions and the ~~$80 million impact~~ongoing recovery from the closure or transition to digital of regional and community newspapers in Australia, partially offset by the $39 million positive impact of foreign currency fluctuations and digital advertising growth at the ~~New York Post~~ ~~and News UK.~~COVID-19. Other revenues increased $9 million, primarily due to higher other services and third-party printing revenues.

Revenues were $541 million for the ~~nine~~six months ended ~~March~~December 31, 2021, ~~decreased $38~~an increase of $68 million, asor 14%, compared to revenues of $473 million in the corresponding period of fiscal ~~2020, primarily due to the $26 million impact from the sale of Unruly in January 2020.~~2021. Circulation and subscription revenues increased $45 million as compared to the corresponding period of fiscal 2020 primarily due to digital subscriber growth across key mastheads, the $45 million positive impact of foreign currency fluctuations and price increases, partially offset by declines in print volume, primarily at News UK. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of $96 million, or 4%, for the nine months ended March 31, 2021 as compared to the corresponding period of fiscal 2020.

Segment EBITDA at the News Media segment declined $45 million, or 46%, for the nine months ended March 31, 2021 as compared to the corresponding period of fiscal 2020, primarily due to the net $37 million impact from the sales of News America Marketing and Unruly in fiscal 2020, the lower contribution from News Corp Australia of $20 million primarily driven by the lower revenues discussed below and the absence of the $22 million one-time benefit from the settlement of certain warranty-related claims in the U.K. in fiscal 2020. The decrease was partially offset by cost savings initiatives and the $12 million higher contribution from the ~~New York Post~~.

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$33 million, primarily driven by higher content licensing revenues, digital subscriber growth and the $4 million positive impact of foreign currency fluctuations. Advertising revenues increased $18 million, primarily due to higher digital advertising revenues driven by higher impressions and the $3 million positive impact of foreign currency fluctuations, partially offset by lower print advertising revenues due mainly to the negative impact of COVID-19-related restrictions in the first quarter of fiscal 2022. Other revenues increased $17 million, primarily due to higher third-party printing and other services revenues.

News ~~Corp Australia~~UK

Revenues were ~~$249~~$263 million for the three months ended ~~March~~December 31, 2021, an increase of $6$18 million, or 2%7%, as compared to revenues of ~~$243~~$245 million in the corresponding period of fiscal ~~2020. The closure or transition to digital of regional and community newspapers in Australia resulted in a revenue decrease of $28 million. Circulation and subscription~~2021. Advertising revenues increased $21 million, primarily driven by the $16 million positive impact from foreign currency fluctuations and digital subscriber growth, partially offset by print volume declines resulting from the closure or transition to digital of regional and community newspapers. Advertising revenues decreased $17$18 million, primarily due to ~~the closure or transition to~~higher digital ~~of regional~~ and ~~community newspapers and continued weakness in the~~ print advertising ~~market exacerbated by COVID-19, partially offset~~revenues driven by the ~~$16 million positive impact~~ongoing recovery of ~~foreign currency fluctuations.~~

~~Revenues were $722 million for~~ the nine months ended March 31, 2021, a decrease of $79 million, or 10%, compared to revenues of $801 million in the corresponding period of fiscal 2020. The closure or transition to digital of regional and community newspapers in Australia resulted in a revenue decrease of $97 million. Advertising revenues decreased $110 million, primarily due to the closure or transition to digital of regional and community newspapers, continued weakness in the print advertising market from COVID-19 and ~~lower digital advertising revenues exacerbated by COVID-19, partially offset by~~ the ~~$27~~$2 million positive impact of foreign currency fluctuations. Circulation and subscription revenues increased ~~$37~~$6 million, primarily driven by digital subscriber growth, cover price increases and the ~~$26~~$3 million positive impact ~~from~~of foreign currency fluctuations, ~~and digital subscriber growth, which were~~ partially offset by print volume ~~declines resulting from the closure or transition~~declines. Other revenues decreased $6 million, primarily due to ~~digital of regional and community newspapers.~~lower brand partnership revenues.

~~News UK~~

Revenues were ~~$235~~$507 million for the ~~three~~six months ended ~~March~~December 31, 2021, an increase of $4$56 million, or 2%12%, as compared to revenues of ~~$231~~$451 million in the corresponding period of fiscal ~~2020.~~2021. Advertising revenues increased $36 million, primarily due to higher digital and print advertising revenues driven by the ongoing recovery of the advertising market from COVID-19 and the $6 million positive impact of foreign currency fluctuations. Circulation and subscription revenues increased ~~$13~~$23 million, primarily driven by the ~~$10~~$12 million positive impact of foreign currency fluctuations, as digital subscriber growth ~~mainly at~~ ~~The Times~~, and cover price increases, ~~mainly at~~ ~~The Sun,~~ ~~were~~ partially offset by ~~single-copy~~print volume ~~declines, primarily at~~ ~~The Sun. Advertising~~declines. Other revenues decreased $9$3 million, primarily due to ~~continued weakness in the print advertising market exacerbated by COVID-19, partially offset by the $4 million positive impact of foreign currency fluctuations and digital advertising growth.~~

Revenues were $686 million for the nine months ended March 31, 2021, a decrease of $27 million, or 4%, as compared to revenues of $713 million in the corresponding period of fiscal 2020. Advertising revenues decreased $35 million, primarily due to continued weakness in the print advertising market exacerbated by COVID-19, partially offset by the $8 million positive impact of foreign currency fluctuations and digital advertising growth. Circulation and subscription revenues increased $14 million, primarily driven by digital subscriber growth, mainly at ~~The Times, the $19 million positive impact of foreign currency fluctuations and cover price increases, mainly at~~ ~~The Sun, which were partially offset by single-copy volume declines, primarily at~~ ~~The Sun~~.lower brand partnership revenues.

LIQUIDITY AND CAPITAL RESOURCES

Current Financial Condition

The Company’s principal source of liquidity is internally generated funds and cash and cash equivalents on hand. As of ~~March~~December 31, 2021, the Company’s cash and cash equivalents were ~~$2.0~~$2.2 billion. ~~Additionally, in April 2021, the Company issued $1.0 billion of 2021 Senior Notes, as discussed below.~~ The Company also has available borrowing capacity under the 2019 News Corp Credit Facility (as defined below) and certain other facilities, as described below, and expects to have access to the worldwide credit and capital markets, subject to market conditions, in order to issue additional debt if needed or desired. The Company currently expects these elements of liquidity will enable it to meet its liquidity needs for at least the next 12 months, including repayment of indebtedness. Although the Company believes that its cash on hand and future cash from operations, together with its access to the credit and capital markets, will provide adequate resources to fund its operating and financing needs for at least the next 12 months, its access to, and the availability of, financing on acceptable terms in the future will be affected by many factors, including: (i) the financial and operational performance of the Company and/or its operating subsidiaries, as applicable, (ii) the Company’s credit ratings and/or the credit rating of its operating subsidiaries, as applicable, (iii) the provisions of any relevant debt instruments, credit agreements, indentures and similar or associated documents, (iv) the liquidity of the overall credit and capital markets and (v) the state of the economy. ~~Some of these factors may be adversely impacted by the COVID-19 pandemic and there~~There can be no assurances that the Company will continue to have access to the credit and capital markets on acceptable terms. ~~See Part I, “Item 1A. Risk Factors” in the 2020 Form 10-K for further discussion.~~

As of ~~March~~December 31, 2021, the Company’s consolidated assets included ~~$1,036~~$862 million in cash and cash equivalents that were held by its foreign subsidiaries. Of this amount, ~~$114~~$141 million is cash not readily accessible by the Company as it is held by REA

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Group, a majority owned but separately listed public company. REA Group must declare a dividend in order for the Company to have access to its share of REA Group’s cash balance. The Company earns income outside the U.S., which is deemed to be permanently reinvested in certain foreign jurisdictions. The Company does not currently intend to repatriate these earnings. Should the Company require more capital in the U.S. than is generated by and/or available to its domestic operations, the Company could elect to transfer funds held in foreign jurisdictions. The transfer of funds from foreign jurisdictions may be cumbersome due to local regulations, foreign exchange controls and taxes. Additionally, the transfer of funds from foreign jurisdictions may result in higher effective tax rates and higher cash paid for income taxes for the Company.

The principal uses of cash that affect the Company’s liquidity position include the following: operational expenditures including employee costs, paper purchases and ~~paper purchases;~~programming costs; capital expenditures; income tax payments; investments in associated entities; acquisitions; the repurchase of shares; dividends; and the repayment of debt and related interest. In addition to the acquisitions and dispositions disclosed elsewhere, the Company has evaluated, and expects to continue to evaluate, possible future acquisitions and dispositions of certain businesses. Such transactions may be material and may involve cash, the issuance of the Company’s securities or the assumption of indebtedness.

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Issuer Purchases of Equity Securities

Stock repurchases commenced on November 9, 2021, and during the three and six months ended December 31, 2021, the Company repurchased and subsequently retired 1.4 million shares of Class A Common Stock for approximately $31 million and 0.7 million shares of Class B Common Stock for approximately $15 million. The Company did not purchase any of its Class A Common Stock or Class B Common Stock during the ~~nine~~six months ended ~~March~~December 31, ~~2021 and~~ 2020.

Dividends

In ~~February~~August 2021, ~~the Company’s Board of Directors (“~~the Board of ~~Directors”)~~Directors declared a semi-annual cash dividend of $0.10 per share for Class A Common Stock and Class B Common Stock. This dividend was paid on ~~April 14,~~October 13, 2021 to stockholders of record as of ~~March 17,~~September 15, 2021. The timing, declaration, amount and payment of future dividends to stockholders, if any, is within the discretion of the Board of Directors. The Board of Directors’ decisions regarding the payment of future dividends will depend on many factors, including the Company’s financial condition, earnings, capital requirements and debt facility covenants, other contractual restrictions, as well as legal requirements, regulatory constraints, industry practice, market volatility and other factors that the Board of Directors deems relevant.

Sources and Uses of Cash—For the ~~nine~~six months ended ~~March~~December 31, 2021 versus the ~~nine~~six months ended ~~March~~December 31, 2020

Net cash provided by operating activities for the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020 was as follows (in millions):


For the nine months ended March 31,		2021		2020
For the six months ended December 31,						For the six months ended December 31,	2021		2020
Net cash provided by operating activities	Net cash provided by operating activities	$	1,060	$	462	Net cash provided by operating activities	$	430	$	483

Net cash provided by operating activities ~~increased~~decreased by ~~$598~~$53 million for the ~~nine~~six months ended ~~March~~December 31, 2021 as compared to the ~~nine~~six months ended ~~March~~December 31, 2020. The ~~increase~~decrease was primarily due to higher ~~Total Segment EBITDA~~working capital, driven by higher receivables from higher revenues, higher employee bonus and ~~lower working capital,~~equity-based compensation payments, payments related to one-time legal settlement costs and $21 million in higher interest payments, partially offset by higher ~~tax payments.~~Total Segment EBITDA.

Net cash used in investing activities for the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020 was as follows (in millions):


For the nine months ended March 31,		2021		2020
For the six months ended December 31,						For the six months ended December 31,	2021		2020
Net cash used in investing activities	Net cash used in investing activities	$	(346)	$	(327)	Net cash used in investing activities	$	(249)	$	(276)

Net cash used in investing activities ~~increased~~decreased by ~~$19~~$27 million for the ~~nine~~six months ended ~~March~~December 31, 2021, as compared to the ~~nine~~six months ended ~~March~~December 31, 2020. During the ~~nine~~six months ended ~~March~~December 31, 2021, the Company used ~~$253~~$208 million of cash for capital expenditures, of which ~~$103~~$89 million related to Foxtel, and ~~used $91~~$67 million ~~primarily~~ for ~~the acquisitions of Elara~~investments and ~~Avail.~~acquisitions.

During the ~~nine~~six months ended ~~March~~December 31, 2020, the Company used ~~$335~~$173 million of cash for capital expenditures, of which ~~$171~~$79 million related to ~~Foxtel.~~Foxtel, and $90 million primarily for the acquisitions of REA India and Avail.

Net cash used in financing activities for the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020 was as follows (in millions):


For the nine months ended March 31,		2021		2020
For the six months ended December 31,						For the six months ended December 31,	2021		2020
Net cash used in financing activities	Net cash used in financing activities	$	(329)	$	(341)	Net cash used in financing activities	$	(198)	$	(219)

Net cash used in financing activities decreased by ~~$12~~$21 million for the ~~nine~~six months ended ~~March~~December 31, 2021, as compared to the ~~nine~~six months ended ~~March~~December 31, 2020. During the ~~nine~~six months ended ~~March~~December 31, 2021, the Company repaid ~~$326~~$500 million of

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borrowings primarily related to ~~Foxtel and~~REA Group’s refinancing of its bridge facility, made dividend payments of ~~$104~~$86 million to News Corporation stockholders and REA Group minority ~~stockholders.~~stockholders, and used $43 million to repurchase outstanding Class A and Class B Common Stock under the Repurchase Program. The net cash used in financing activities was partially offset by new borrowings of $495 million primarily related to ~~Foxtel~~REA Group.

Table of ~~$165 million.~~Contents

During the ~~nine~~six months ended ~~March~~December 31, 2020, the Company repaid ~~$1,161~~$248 million of borrowings related to Foxtel and ~~REA Group, which included repayments made as part of the debt refinancings completed in the second quarter of fiscal 2020, and~~ made dividend payments of ~~$100~~$80 million to News Corporation stockholders and REA Group minority stockholders. The net cash used in financing activities for the ~~nine~~six months ended ~~March~~December 31, 2020 was partially offset by new borrowings related to Foxtel ~~and REA Group~~ of ~~$925 million, which included drawdowns under the new facilities entered into as part of the debt refinancings referenced above, and the net settlement of hedges of $57~~$146 million.

Reconciliation of Free Cash Flow Available to News Corporation

Free cash flow available to News Corporation is a non-GAAP financial measure defined as net cash provided by operating activities, less capital expenditures (“free cash flow”), less REA Group free cash flow, plus cash dividends received from REA Group. Free cash flow available to News Corporation should be considered in addition to, not as a substitute for, cash flows from operations and other measures of financial performance reported in accordance with GAAP. Free cash flow available to News Corporation may not be comparable to similarly titled measures reported by other companies, since companies and investors may differ as to what items should be included in the calculation of free cash flow.

The Company considers free cash flow available to News Corporation to provide useful information to management and investors about the amount of cash that is available to be used to strengthen the Company’s balance sheet and for strategic opportunities including, among others, investing in the Company’s business, strategic acquisitions, dividend payouts and repurchasing stock. The Company believes excluding REA Group’s free cash flow and including dividends received from REA Group provides users of its consolidated financial statements with a measure of the amount of cash flow that is readily available to the Company, as REA Group is a separately listed public company in Australia and must declare a dividend in order for the Company to have access to its share of REA Group’s cash balance. The Company believes free cash flow available to News Corporation provides a more conservative view of the Company’s free cash flow because this presentation includes only that amount of cash the Company actually receives from REA Group, which has generally been lower than the Company’s unadjusted free cash flow.

A limitation of free cash flow available to News Corporation is that it does not represent the total increase or decrease in the cash balance for the period. Management compensates for the limitation of free cash flow available to News Corporation by also relying on the net change in cash and cash equivalents as presented in the Statements of Cash Flows prepared in accordance with GAAP which incorporate all cash movements during the period.

The following table presents a reconciliation of net cash provided by operating activities to free cash flow available to News Corporation:


		For the nine months ended March 31,					For the six months ended December 31,
		2021		2020			2021		2020
		(in millions)					(in millions)
Net cash provided by operating activities	Net cash provided by operating activities	$	1,060	$	462	Net cash provided by operating activities	$	430	$	483
Less: Capital expenditures	Less: Capital expenditures	(253)		(335)		Less: Capital expenditures	(208)		(173)
		807		127			222		310
Less: REA Group free cash flow	Less: REA Group free cash flow	(114)		(129)		Less: REA Group free cash flow	(121)		(65)
Plus: Cash dividends received from REA Group	Plus: Cash dividends received from REA Group	69		65		Plus: Cash dividends received from REA Group	43		32
Free cash flow available to News Corporation	Free cash flow available to News Corporation	$	762	$	63	Free cash flow available to News Corporation	$	144	$	277

Free cash flow available to News Corporation ~~increased~~decreased by ~~$699~~$133 million in the ~~nine~~six months ended ~~March~~December 31, 2021 to ~~$762~~$144 million from ~~$63~~$277 million in the corresponding period of fiscal ~~2020,~~2021, primarily due to ~~higher~~lower net cash provided by operating activities as discussed above and ~~lower~~higher capital ~~expenditures.~~expenditures, partially offset by higher dividends received from REA Group.

Borrowings

As of ~~March~~December 31, 2021, the Company, had total borrowings of $1.2 billion, including the current portion and finance lease liabilities. The Company’s borrowings as of such date primarily consisted of (i) $921 million of outstanding debt incurred by

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certain subsidiaries of NXE Australia Pty Limited ~~(“Foxtel”~~(the “Foxtel Group” and together with such subsidiaries, the “Foxtel Debt Group”) and ~~(ii) $183 million of outstanding debt incurred by~~ REA Group and certain of its subsidiaries (REA Group and ~~such~~certain of its subsidiaries, the “REA Debt Group”). had total borrowings of $2.3 billion, including the current portion and finance lease liabilities. Both the Foxtel Group and REA Group are consolidated but non wholly-owned subsidiaries of News Corp, and their indebtedness is only guaranteed by members of the Foxtel Debt Group and REA Debt Group, ~~and certain of their subsidiaries,~~ respectively, and is non-recourse to News Corp.

~~REA~~

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News Corp Borrowings

As of December 31, 2021, the Company had borrowings of $986 million, which consisted of the carrying value of its 2021 Senior Notes.

Foxtel Group Borrowings

As of December 31, 2021, the Foxtel Debt Group had (i) borrowings of approximately $905 million, including the full drawdown of its 2019 Term Loan Facility, amounts outstanding under the 2019 Credit Facility and 2017 Working Capital Facility, its outstanding U.S. private placement senior unsecured notes and amounts outstanding under the Telstra Facility (described below), and (ii) total undrawn commitments of A$340 million available under the 2017 Working Capital Facility and 2019 Credit Facility.

In addition to third-party indebtedness, the Foxtel Debt Group has ~~access to an~~related party indebtedness, including A$20900 million ~~overdraft facility (the “2020 Overdraft Facility”).~~of outstanding shareholder loans and available facilities from the Company. The ~~2020 Overdraft Facility is an uncommitted facility that will be reviewed annually by the lender and bears~~shareholder loans accrue interest at a variable rate ~~based~~of the Australian BBSY plus an applicable margin ranging from 6.30% to 7.75% and mature in December 2027. The shareholder revolving credit facility accrues interest at a variable rate of the Australian BBSY plus an applicable margin ranging from 2.00% to 3.75%, depending on the ~~lender’s benchmark borrowing~~Foxtel Debt Group’s net leverage ratio, and matures in July 2024. Additionally, the Foxtel Debt Group has an A$170 million subordinated shareholder loan facility agreement with Telstra which can be used to finance cable transmission costs due to Telstra. The Telstra Facility accrues interest at a variable rate ~~less a discount of 4.22%. The 2020 Overdraft Facility carries an annual facility fee of 0.15%~~ of the ~~A$20 million overdraft limit.~~ Australian BBSY plus an applicable margin of 7.75% and matures in December 2027. The Company excludes the utilization of the Telstra Facility from the Statements of Cash Flows because it is non-cash.

REA Group Borrowings

As of ~~March~~December 31, 2021, REA Group had ~~not borrowed any funds~~(i) borrowings of approximately $297 million, consisting of amounts outstanding under its 2022 Credit Facility (as defined below), and (ii) A$187 million of undrawn commitments available under its 2022 Credit Facility.

Borrowings under the ~~2020 Overdraft Facility. In October 2020,~~2022 Credit facility — tranche 1 accrue interest at a rate of the Australian BBSY plus a margin of between 1.00% and 2.10%, depending on REA ~~Group amended certain terms~~Group’s net leverage ratio. Borrowings under the 2022 Credit facility — tranche 2 accrue interest at a rate of ~~its credit facilities to, among other things, require~~the Australian BBSY plus a margin of between 1.15% and 2.25%, depending on REA Group’s net leverage ratio. Both tranches carry a commitment fee of 40% of the applicable margin on any undrawn balance.

The 2022 Credit Facility requires REA Group to maintain (i) a net leverage ratio of not more than 3.5 to 1.0 asand (ii) an interest coverage ratio of ~~and subsequent~~not less than 3.0 to ~~December 31, 2020.~~1.0.

News Corp Revolving Credit Facility

The Company has ~~access to~~ an ~~unsecured~~undrawn $750 million unsecured revolving credit facility (the “2019 News Corp Credit Facility”) that can be used for general corporate ~~purposes. The 2019 News Corp Credit Facility has~~purposes, which terminates on December 12, 2024.

Due to the discontinuation of London interbank offered rates (“LIBOR”) for Euro and British pound sterling (“GBP”)-denominated borrowings and for certain Eurodollar Rate borrowings with a ~~sublimit of $100 million available for issuances of letters of credit. The~~two or 12-month tenor, the Company ~~may request increases in the amount of the facility up to a maximum amount of $1 billion. The lenders’ commitments to make~~amended the 2019 News Corp Credit Facility ~~available terminate~~in November 2021 to (i) replace the benchmark rates for borrowings in Euro and GBP with designated benchmark rates based on ~~December 12, 2024,~~the Euro Interbank Offer Rate and the ~~Company may request that~~Sterling Overnight Index Average, respectively, and (ii) remove the ~~commitments be extended under certain circumstances~~two and 12-month interest period options for ~~up to two additional one-year periods. As of March 31, 2021,~~ the ~~Company has not borrowed any funds under the 2019 News Corp Credit Facility.~~relevant Eurodollar Rate borrowings.

All of the Company’s borrowings contain customary representations, covenants and events of default. The Company was in compliance with all such covenants at ~~March~~December 31, 2021.

On April 9, 2021, the Foxtel Debt Group amended its 2019 Credit Facility and 2017 Working Capital Facility to, among other things, extend the debt maturity from November 2022 to May 2024 and reduce the applicable margin to between 2.00% to 3.25%, depending on the Foxtel Debt Group’s net leverage ratio.

See Note 6—Borrowings in the accompanying Consolidated Financial Statements for further details regarding the Company’s outstanding debt, including certain information about interest rates and maturities related to such debt arrangements.

On April 15, 2021, the Company issued $1 billion of 2021 Senior Notes. The 2021 Senior Notes will bear interest at a fixed rate of 3.875% per annum, payable in cash semi-annually on May 15 and November 15 of each year, commencing November 15, 2021. The notes will mature on May 15, 2029. The Company plans to use the net proceeds from the offering for general corporate purposes, which may include acquisitions and working capital.

Commitments

The Company has commitments under certain firm contractual arrangements (“firm commitments”) to make future payments. These firm commitments secure the current and future rights to various assets and services to be used in the normal course of

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operations. The Company’s commitments as of ~~March~~December 31, 2021 have not changed significantly from the disclosures included in the ~~2020~~2021 Form ~~10-K and the Company’s Form 10-Q for the quarter ended December 31, 2020.~~10-K.

Contingencies

The Company routinely is involved in various legal proceedings, claims and governmental inspections or investigations, including those discussed in Note 10 to the Consolidated Financial Statements. The outcome of these matters and claims is subject to significant uncertainty, and the Company often cannot predict what the eventual outcome of pending matters will be or the timing of the ultimate resolution of these matters. Fees, expenses, fines, penalties, judgments or settlement costs which might be incurred by the Company in connection with the various proceedings could adversely affect its results of operations and financial condition.

The Company establishes an accrued liability for legal claims when it determines that a loss is both probable and the amount of the loss can be reasonably estimated. Once established, accruals are adjusted from time to time, as appropriate, in light of additional information. The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for such matters. Legal fees associated with litigation and similar proceedings are expensed as incurred. The Company recognizes gain contingencies when the gain becomes realized or realizable. See Note 10—Commitments and Contingencies in the accompanying Consolidated Financial Statements.

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these liabilities may need to be adjusted as new information becomes known and as tax examinations continue to progress, or as settlements or litigations occur.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There has been no material change in the Company’s assessment of its sensitivity to market risk since its presentation set forth in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in the Company’s ~~2020~~2021 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

(a)Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this quarterly report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and were effective in ensuring that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b)Internal Control Over Financial Reporting

There has been no change in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) during the Company’s ~~third~~second quarter of fiscal ~~2021~~2022 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II

ITEM 1. LEGAL PROCEEDINGS

See Note 10—Commitments and Contingencies in the accompanying Consolidated Financial Statements.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors described in the ~~Company’s 2020~~2021 Form 10-K, except as ~~supplemented by~~set forth below:

The Company Relies on Network and Information Systems and Other Technology Whose Failure or Misuse Could Cause a Disruption of Services or Loss, Improper Access to or Disclosure of Personal Data, Business Information, Including Intellectual Property, or Other Confidential Information, Resulting in Increased Costs, Loss of Revenue, Reputational Damage or Other Harm to the Company’s ~~Quarterly Report~~Business.

Network and information systems and other technologies, including those related to the Company’s content delivery networks and network management, are important to its business activities and contain the Company’s proprietary, confidential and sensitive business information, including personal data of its customers and personnel. The Company also relies on ~~Form 10-Q~~third-party providers for certain technology and “cloud-based” systems and services that support a variety of business operations. In January 2022, the ~~period ended September 30, 2020.~~Company discovered that one of these systems was the target of persistent cyberattack activity. Together with an outside cybersecurity firm, the Company is conducting an investigation into the circumstances of the activity to determine its nature, scope, duration and impacts. The Company’s preliminary analysis indicates that foreign government involvement may be associated with this activity, and that data was taken. To the Company’s knowledge, its systems housing customer and financial data were not affected. The Company is remediating the issue, and to date has not experienced any related interruptions to its business operations or systems. Based on its investigation to date, the Company believes the activity is contained. At this time, the Company is unable to estimate the expenses it will incur in connection with its investigation and remediation efforts.

Network and information systems-related events affecting the Company’s systems, or those of third parties upon which the Company’s business relies, such as computer compromises, cyber threats and attacks, computer viruses, worms or other destructive or disruptive software, process breakdowns, ransomware and denial of service attacks, malicious social engineering or other malicious activities by individuals or state-sponsored or other groups, or any combination of the foregoing, as well as power and internet outages, equipment failure, natural disasters, including extreme weather (which may occur with increasing frequency and intensity), terrorist activities, war, human or technological error or malfeasance that may affect such systems, could result in disruption of the Company’s services and business and/or loss, corruption, improper access to or disclosure of personal data, business information, including intellectual property, or other confidential information. Unauthorized parties may also fraudulently induce the Company’s employees or other agents to disclose sensitive or confidential information in order to gain access to the Company’s systems, facilities or data, or those of third parties with whom the Company does business. In addition, any design or manufacturing defects in, or the improper implementation of, hardware or software applications the Company develops or procures from third parties could unexpectedly disrupt the Company’s network and information systems or compromise information security. System redundancy may be ineffective or inadequate, and the Company’s disaster recovery and business continuity planning may not be sufficient to address all potential cyber events or other disruptions.

In recent years, there has been a significant rise in the number of cyberattacks on companies’ network and information systems, and such attacks are becoming increasingly more sophisticated, targeted and difficult to detect and prevent against. As a result of the COVID-19 pandemic, remote work and remote access to the Company’s systems has increased significantly, which may adversely impact the effectiveness of the Company’s security measures. Consequently, the risks associated with such an event continue to increase, particularly as the Company’s digital businesses expand. The Company has experienced, and expects to continue to be subject to, cybersecurity threats and activity. There is no assurance that cybersecurity threats or activity such as that discovered in January 2022 will not have a material adverse effect in the future. Countermeasures that the Company and its vendors have developed and implemented to protect personal data, business information, including intellectual property, and other confidential information, to prevent system disruption, data loss or corruption, and to prevent or detect security breaches may not be successful in preventing these events, particularly given that techniques used to access, disable or degrade service, or sabotage systems change frequently. Additionally, it may be difficult to detect and defend against certain threats and vulnerabilities that can persist over extended periods of time. Any network and information systems-related events could require the Company to expend significant resources to remedy such event. Moreover, the development and maintenance of these measures is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. While the Company maintains cyber risk insurance, this insurance may not be sufficient to cover all losses from any breaches of the Company’s systems and does not extend to reputational damage or costs incurred to improve or strengthen systems against future threats or activity. Cyber risk insurance has also become more difficult and

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expensive to obtain, and the Company cannot be certain that its current level of insurance or the breadth of its terms and conditions will continue to be available on economically reasonable terms.

A significant failure, compromise, breach or interruption of the Company’s systems, or those of third parties upon which its business relies, could result in a disruption of its operations, including degradation or disruption of service, equipment damage, customer, audience or advertiser dissatisfaction, damage to its reputation or brands, regulatory investigations and enforcement actions, lawsuits, remediation costs, a loss of or inability to attract new customers, audience, advertisers or business partners or loss of revenues and other financial losses. If any such failure, compromise, breach, interruption or similar event results in improper access to or disclosure of information maintained in the Company’s information systems and networks or those of its vendors, including financial, personal and credit card data, as well as confidential and proprietary information relating to personnel, customers, vendors and the Company’s business, including its intellectual property, the Company could also be subject to liability under relevant contractual obligations and laws and regulations protecting personal data and privacy, as well as private individual or class action lawsuits. The Company may also be required to notify certain governmental agencies and/or regulators (including the appropriate EU supervisory authority) about any actual or perceived data security breach, as well as the individuals who are affected by any such breach, within strict time periods. In addition, media or other reports of perceived security vulnerabilities in the Company’s systems or those of third parties upon which its business relies, even if nothing has actually been attempted or occurred, could also adversely impact the Company’s brand and reputation and materially affect its business, results of operations and financial condition.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~None.~~On September 22, 2021, the Company announced a new stock repurchase program authorizing the Company to purchase up to $1 billion in the aggregate of its outstanding Class A Common Stock and Class B Common Stock (the “Repurchase Program”). The Repurchase Program replaces the Company’s $500 million Class A Common Stock repurchase program approved by the Company’s Board of Directors (the “Board of Directors”) in May 2013. The manner, timing, number and share price of any repurchases will be determined by the Company at its discretion and will depend upon such factors as the market price of the stock, general market conditions, applicable securities laws, alternative investment opportunities and other factors. The Repurchase Program has no time limit and may be modified, suspended or discontinued at any time.

The following table details our monthly share repurchases during the three months ended December 31, 2021:


	Total Number of Shares Purchased - Class A(a)	Total Number of Shares Purchased - Class B(a)	Average Price Paid Per Share - Class A(b)		Average Price Paid Per Share - Class B(b)		Total Number of Shares Purchased as Part of Publicly Announced Program	Dollar Value of Shares That May Yet Be Purchased Under Publicly Announced Program(b)
	(in millions, except per share amounts)
September 27, 2021 - October 24, 2021	—	—	$	—	$	—	—	$	1,000
October 25, 2021 - November 28, 2021	0.5	0.3	$	22.95	$	23.05	0.8	$	982
November 29, 2021 - December 26, 2021	0.9	0.4	$	21.62	$	21.77	1.3	$	954
Total	1.4	0.7	$	22.11	$	22.25	2.1

(a) The Company has not made any repurchases of Common Stock other than in connection with the publicly announced stock repurchase program described above.

(b) Amounts exclude fees, commissions or other costs associated with the repurchases.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable.

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ITEM 6. EXHIBITS

(a) Exhibits.


~~4.1~~2.1						~~Indenture,~~Amended and Restated FOX SPORTS Trade Mark License Agreement, dated ~~April 15,~~as of October 22, 2021, between ~~the Company~~Fox Media LLC and U.S. Bank National Association, as trustee. (Incorporated by reference to Exhibit 4.1 to the Current Report of News Corporation on Form 8-K (File No. 001-35769) filed with the Securities and Exchange Commission on ~~April~~ ~~15, 2021.)~~Fox Sports Australia Pty Limited.*

~~4.2~~2.2						~~Form~~Amended and Restated FOX Trade Mark License Agreement, dated as of ~~3.875% Senior Notes due 2029. (Incorporated by reference to Exhibit 4.2 to the Current Report~~October 22, 2021, between Fox Media LLC and Fox Sports Australia Pty Limited.*

2.3						Amended and Restated Foxtel Trade Mark License Agreement, dated as of ~~News Corporation on Form 8-K (File No. 001-35769) filed with the Securities~~October 22, 2021, between Fox Media LLC and ~~Exchange Commission on April 15, 2021.)~~Foxtel Management Pty Ltd.*

2.4						Amended and Restated FOX Trade Mark License Agreement, dated as of October 22, 2021, between Fox Media LLC and Foxtel Management Pty L imited *†

10.1						Amendment No.1, dated as of November 16, 2021, to the Credit Agreement, dated as of ~~April 8, 2021,~~December 12, 2019, among News Corporation as borrower, the several banks and other financial institutions or entities from time to time parties to the ~~Syndicated Facility~~Credit Agreement, ~~dated~~JPMorgan Chase Bank, N.A. as of November 14, 2019, among Foxtel Management Pty Limited, as initial borrower, the initial financiers named therein, the MLABs named therein and Commonwealth Bank of Australia, as facility agent.*

~~10.2~~						~~Deed of Amendment, dated as of April 8, 2021, to the Multi-Option Facility Agreement, dated as of June 30, 2017, among Foxtel Management Pty Limited, Foxtel Finance Pty Limited~~administrative agent, and the other original borrowers listed therein and Commonwealth Bank of Australia, as the original lender.*

~~10.3~~						Guarantor Assumption Deed Poll, dated as of April 8, 2021, to the Common Terms Deed Poll, dated as of April 10, 2012, executed by Multi Channel Network Pty Ltd.*

~~10.4~~						Form of Agreement for Cash-Settled Restricted Stock Units under the News Corporation 2013 Long-Term Incentive Plan.*

~~10.5~~						~~Form of Agreement for Stock-Settled Restricted Stock Units under the News Corporation 2013 Long-Term Incentive Plan.~~parties thereto.*

31.1						Chief Executive Officer Certification required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended.*

31.2						Chief Financial Officer Certification required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended.*

32.1						Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.**

101						The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~March~~December 31, 2021 formatted in Inline XBRL: (i) Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~March~~December 31, 2021 and 2020 (unaudited); (ii) Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the three and ~~nine~~six months ended ~~March~~December 31, 2021 and 2020 (unaudited); (iii) Consolidated Balance Sheets as of ~~March~~December 31, 2021 (unaudited) and June 30, ~~2020~~2021 (audited); (iv) Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020 (unaudited); and (v) Notes to the Unaudited Consolidated Financial Statements.*

104						The cover page from News Corporation’s Quarterly Report on Form 10-Q for the quarter ended ~~March~~December 31, 2021, formatted in Inline XBRL (included as Exhibit 101).*

* Filed herewith.

** Furnished herewith

† Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10) of Regulation S-K.

Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	NEWS CORPORATION (Registrant)

	By:	/s/ Susan Panuccio
		Susan Panuccio Chief Financial Officer

Date: ~~May 7, 2021~~February 4, 2022

5049


	Interest rate at March 31, 2021		Maturity at March 31, 2021	As of March 31, 2021		As of June 30, 2020
				(in millions)
Foxtel Group
Credit facility 2019(a) (c)	2.83	%	Nov 22, 2022	$	248	$	371
Term loan facility 2019(b)	6.25	%	Nov 22, 2024	191		171
Working capital facility 2017(a) (c)	2.83	%	Nov 22, 2022	0		0
Telstra Facility(d)	7.81	%	Dec 22, 2027	50		11
US private placement 2012 — USD portion — tranche 2(e)	4.27	%	Jul 25, 2022	201		200
US private placement 2012 — USD portion — tranche 3(e)	4.42	%	Jul 25, 2024	151		150
US private placement 2012 — AUD portion	7.04	%	Jul 25, 2022	80		73
REA Group
Credit facility 2018(f)	0.91	%	Apr 27, 2021	53		48
Credit facility 2019(g)	0.91	%	Dec 2, 2021	130		117
Credit facility 2020(h)	2.06	%	Dec 2, 2021	0		0
Finance lease and other liabilities				108		118
Total borrowings(i)				1,212		1,259
Less: current portion(j)				(212)		(76)
Long-term borrowings				$	1,000	$	1,183


	As of March 31,
	2021	2020
	(in 000's)
Broadcast Subscribers
Residential(a)	1,711	1,942
Commercial(b)	235	266
OTT Subscribers (Total (Paid))
Foxtel Now(c)	238 (228 paid)	338 (317 paid)
Kayo(d)	914 (851 paid)	444 (408 paid)
Binge(e)	679 (516 paid)	—
Total Paid Subscribers	3,541	2,933